Diasakos, Theodoros M.; Koufopoulos, Kostas - School of Economics and Finance, University of St. Andrews
This paper revisits the problem of adverse selection in the insurance market of Rothschild and Stiglitz (QJE, 1976). We propose a simple extension of the game-theoretic structure in Hellwig (EER, 1987) under which Nash-type strategic interaction between the informed customers and the uninformed...
