and Per-Olov Johansson
Ake Blomqvist: Department of Economics, Postal: University of Western Ontario, London, Ontario N6A 5C2
Per-Olov Johansson: Centre for Health Economics, Postal: Stockholm School of Economics, Box 6501, S-113 83 STOCKHOLM, SWEDEN
Abstract: In this paper we discuss the efficiency properties of insurance markets where supplementary private insurance is allowed to exist together with a compulsory government insurance plan. Our main conclusion, which is contrary to both those of Besley (1989) and Selden (1993), is that in a simple model focussing on the moral hazard problem alone, a mixed system will generally be strictly less efficient than a purely private (competitive) system. We also show that there is a flaw in Selden's (1993) main proposition, which at least in part invalidates his result on the welfare properties of systems of mixed government/private insurance.
16 pages, March 1996
Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2018-03-27 10:24:39.