Diasakos, Theodoros M.; Koufopoulos, Kostas - Collegio Carlo Alberto, Università degli Studi di Torino - 2011
This paper revisits the problem of adverse selection in the insurance market of Rothschild and Stiglitz (1976). We propose a simple extension of the game-theoretic structure in Hellwig (1987) under which Nash-type strategic interaction between the informed customers and the uninformed firms...