Authors:

  • Nathaniel Hendren

Excerpt

Unraveling versus Unraveling: A Memo on Competitive Equilibriums and Trade in Insurance Markets. Nathaniel Hendren, January 2014, Paper. "Both Akerlof (1970) and Rothschild and Stiglitz (1976) show that insurance markets may “un-ravel”. This memo clarifies the distinction between these two notions of unraveling in the context of a binary loss model of insurance. I show that the two concepts are mutually exclusive occurrences. Moreover, I provide a regularity condition under which the two concepts are exhaustive of the set of possible occurrences in the model..." Link Verified October 12, 2014