Repeated insurance contracts and moral hazard

Ariel Rubinstein; Menahem E. Yaari

doi:10.1016/0022-0531(83)90094-7

Repeated insurance contracts and moral hazard

Ariel Rubinstein^*, Menahem E. Yaari

^*Corresponding author for this work

Department of Economics

Research output: Contribution to journal › Article › peer-review

131 Scopus citations

Abstract

An attempt is made to account for the frequently observed phenomenon of insurance companies offering discounts to clients who possess a favorable record of past claims. We argue that such discounts provide a mechanism which enables both insurer and insured to counteract the inefficiency which arises from moral hazard.

Original language	English
Pages (from-to)	74-97
Number of pages	24
Journal	Journal of Economic Theory
Volume	30
Issue number	1
DOIs	https://doi.org/10.1016/0022-0531(83)90094-7
State	Published - Jun 1983

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Repeated insurance contracts and moral hazard

Abstract

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