Game Analysis Of The Insurance Market, Asymmetric Information Problems

Using the game theory, this dissertation focuses on some asymmetrical information issues on the insurance markets. It is organized as follows:The first part, including one chapter, presents the experimental foundation of risk-aversion assumption and the three basic forms of insurance.The second part, including three chapters, presents the game theory of asymmetrical information on insurance markets. In chapter two, firstly, we introduce the state-space diagram in detail, which is the main tool to study the adverse-selection issues. Secondly, we analyse the properties of the insurance policies at equilibrium and the allocation of the customer's surplus in various market structures. In chapter three, we examine the pool insurance policies, the separate insurance policies and their equilibria conditions in the presence of adverse selection, and then we examine the properties of the multi-period insurance policies. In chapter four, we examine the equilibrium policies in the presence of moral hazard.The third part, including four chapters, is the key content of this dissertation. In this part, using the state-space diagrams and the game theory, we study the effects of risk classfication and rate regulation, principle of utmost good faith, insurance fraud etc.Chapter five focuses on the effect comparison of two classfication schemes-the rating-institution scheme and the independent scheme under the imperfect classfication. The analysis reveals that the little scale insurers should employ the rating-institution classifications, due to their low accuracy and high cost, and that the large firms ought to employ the independent scheme when their accurate advantage overcomes the institution's cost advantage. The findings suggest that it is essential to establish risk-rating institution in our countryIn chapter six, firstly, we study the short-term and the long-term effects of the rate regulation. The researsh results indicate that rate regulation iseffective in the short term, but is ineffective in the long run. Secondly, we study the abilities of insurance company to respond to the markets in the presence of advese selection. The findings reveal that the rate regulation weakens the abilities of insurance company to respond to the changing markets, makes the company's rate adjustment lag behind the markets change, and results in company's profits fluctuating. Besides, a serious negative effect of rate regulation is that the policy holders' welfares suffer loss. In view of this, it is necessary that the rate should be determined by the markets in our country.In chapter seven, using the game theory, we study the optimal investigation strategies and the optimal payment strategies, depending on the facts that whether the policyholders tell the truth about the their risk. Firstly, we study the optimal investigation strategies of the insurance company under complete asymmetrical information conditions. The research results reveal that under this conditions the optimal investigation strategies of insurance company are: for the claim of policyholder who has purchased the low-risk insurance policies, the company should carry out deterministic investigation. Secondly, we study the optimal investigation strategies and the optimal payment strategies of insurance firms under partial asymmetrical information conditions. The research results indicate that under this conditions, the optimal strategies of the insurers are: for the claim of policyhloder who has purchased the low-risk insurance policies, the insurers should carry out random investigation; if the policyhloder is bad faith, the company should not pay the average and not return the premium to the insured. This is just the stipulation of clause seventeen in "Insurance Law".In chapter eight, using the game theory, we study the optimal investigation strategies and the optimal payment strategies under insurance fraud. Firstly, we study the properties of equilibrium policies under the costly state verification and costly state falsification conditions. The resear...