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Jean Baccelli - One of the best experts on this subject based on the ideXlab platform.
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Moral Hazard, the Savage Framework, and State-Dependent Utility
Erkenntnis, 2019Co-Authors: Jean BaccelliAbstract:In this paper, I investigate the betting behavior of a decision-maker who can influence the likelihood of the events upon which she is betting. In decision theory, this is best known as a situation of Moral Hazard. Focusing on a particularly simple case, I sketch the first systematic analysis of Moral Hazard in the canonical Savage framework. From the results of this analysis, I draw two philosophical conclusions. First, from an observational and a descriptive point of view, there need to be no incompatibility between Moral Hazard and the Savage framework. This qualifies the incompatibility view, that is ubiquitous in decision theory. Second, in general, Moral Hazard is not sufficient to overcome the challenges posed by state-dependent utility to the behavioral identification of beliefs. This qualifies the sufficiency view, that is influential in decision theory. These two philosophical conclusions are the main contributions of my paper.
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Moral Hazard, the Savage Framework, and State-Dependent Utility *
Erkenntnis, 2019Co-Authors: Jean BaccelliAbstract:In this paper, I investigate the betting behavior of a decision-maker who can influence the likelihood of the events upon which she is betting. In decision theory, this is best known as a situation of Moral Hazard. Focusing on a particularly simple case, I sketch the first systematic analysis of Moral Hazard in the canonical Savage framework. From the results of this analysis, I draw two philosophical conclusions. First, from an observational and a descriptive point of view, there need to be no incompatibility between Moral Hazard and the Savage framework. This qualifies the incompatibility view, that is ubiquitous in decision theory. Second, in general, Moral Hazard is not sufficient to overcome the challenges posed by state-dependent utility to the behav-ioral identification of beliefs. This qualifies the sufficiency view, that is influential in decision theory. These two philosophical conclusions are the main contributions of my paper.
Mark R Cullen - One of the best experts on this subject based on the ideXlab platform.
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selection on Moral Hazard in health insurance
The American Economic Review, 2013Co-Authors: Liran Einav, Amy Finkelstein, Stephen P Ryan, Paul Schrimpf, Mark R CullenAbstract:In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on Moral Hazard" can have important implications for attempts to combat either selection or Moral Hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous Moral Hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and Moral Hazard. For example, one implication of our estimates is that abstracting from selection on Moral Hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.
Liran Einav - One of the best experts on this subject based on the ideXlab platform.
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selection on Moral Hazard in health insurance
The American Economic Review, 2013Co-Authors: Liran Einav, Amy Finkelstein, Stephen P Ryan, Paul Schrimpf, Mark R CullenAbstract:In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on Moral Hazard" can have important implications for attempts to combat either selection or Moral Hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous Moral Hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and Moral Hazard. For example, one implication of our estimates is that abstracting from selection on Moral Hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.
Paul Schrimpf - One of the best experts on this subject based on the ideXlab platform.
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selection on Moral Hazard in health insurance
The American Economic Review, 2013Co-Authors: Liran Einav, Amy Finkelstein, Stephen P Ryan, Paul Schrimpf, Mark R CullenAbstract:In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on Moral Hazard" can have important implications for attempts to combat either selection or Moral Hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous Moral Hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and Moral Hazard. For example, one implication of our estimates is that abstracting from selection on Moral Hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.
Stephen P Ryan - One of the best experts on this subject based on the ideXlab platform.
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selection on Moral Hazard in health insurance
The American Economic Review, 2013Co-Authors: Liran Einav, Amy Finkelstein, Stephen P Ryan, Paul Schrimpf, Mark R CullenAbstract:In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on Moral Hazard" can have important implications for attempts to combat either selection or Moral Hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous Moral Hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and Moral Hazard. For example, one implication of our estimates is that abstracting from selection on Moral Hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.