Asymmetric Information and Insurance

… a core concept in Economic Analysis and Atlas102

Click for MRU video

Click for MRU video

Concept description

Tyler Cowen (reference below, video on right) explores the implications of asymmetric information for health insurance.

Cowen outlines the content:

“In this video, we discuss asymmetric information, adverse selection, and propitious selection in relation to the market for health insurance. Health insurance consumers come in a range of health, but to insurance companies, everyone has the same average health. Consumers have more information about their health than do insurers. How does this affect the price of health insurance? Why would some consumers prefer to not buy health insurance at all? And how does this all relate to the Affordable Care Act?”

Assessment questions

From http://www.mruniversity.com/node/318710, accessed 10 May 2016.

  1. Which of the following concepts or policies below theoretically reduce the effects of adverse selection in the health insurance market?

Atlas topic, subject, and course

Asymmetric Information, Signaling, and Game Theory (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Source

Tyler Cowen, Asymmetric Information in Health Insurance (8-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/lemons-problem-asymmetric-information-health-insurance, accessed 10 May 2016.

Page created by: Ian Clark, last modified 10 May 2016.

Image: Tyler Cowen, minute 0:17 of Asymmetric Information in Health Insurance (8-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/lemons-problem-asymmetric-information-health-insurance, accessed 10 May 2016.