3 Questions
Which condition is necessary for the existence of efficient insurance supply?
There is no moral hazard (hidden action)
What is a necessary condition for the existence of efficient insurance supply?
Probabilities of risks are independent across individuals
Which condition must be met for efficient insurance supply to exist?
Risk probability is known and could be estimated
Test your understanding of the technical conditions necessary for the existence of efficient insurance supply. Explore concepts such as independent risk probabilities, known risk probabilities, adverse selection, and moral hazard.
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