Insurance law and incomplete contracts
研究了保险法如何通过允许保险公司在某些情况下减少或取消赔付来缓解道德风险，分析了不完全合同下基于概率平衡标准的审计与法庭决策，发现最优保险法能提升效率。
Abstract We analyze how insurance law can mitigate moral hazard by allowing insurers to reduce or cancel coverage in some circumstances. We consider an incomplete contract setting in which the insurer may obtain information related to the policyholder's behavior through a costly audit of the circumstances of the loss. Court decisions are based on a standard of proof such as the balance of probabilities. We show that an optimal insurance law brings efficiency gains compared to the no‐audit case. We also highlight the conditions under which the burden of proof should be on the insured, provided that insurers are threatened with sanctions for bad faith.