The existence of the Miyazaki-Wilson-Spence equilibrium with continuous type distributions

Irina Gemmo, Christian Kubitza and Casey Rothschild

No 32/18, ICIR Working Paper Series from Goethe University Frankfurt, International Center for Insurance Regulation (ICIR)

Abstract: We prove the existence of an equilibrium in competitive markets with adverse selection in the sense of Miyazaki (1977), Wilson (1977), and Spence (1978) when the distribution of unobservable risk types is continuous. Our proof leverages the finite-type proof in Spence (1978) and a limiting argument akin to Hellwig (2007)'s study of optimal taxation.

Keywords: asymmetric and private information; insurance market; adverse selection; equilibrium (search for similar items in EconPapers)
JEL-codes: D41 D82 G22 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:icirwp:3218

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