2003•Unpublished venueRequires access
Asymmetric Information and Optimal Insurance Contract Design
Liu Xi-hua
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Abstract
In this paper,two main models under the circumstance of asymmetric information in the insurance market—— — the adverse selection and moral hazard are studied.Firstly,the concepts and creation mechanisms of adverse selection and moral hazard are explained,and how to avoid them generally is discussed.Then the idea of optimal insurance contract design under the circumstance of asymmetric information is elaborated.