The Coexistence of Distribution Systems When Consumers Are Not Informed

Seog, S. Hun

doi:10.1023/a:1008741627883

Cited by 18 publications

(11 citation statements)

References 16 publications

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“…Posey and Yavas (1995) as well as Posey and Tennyson (1998) study search cost models while Cosimano (1996) looks at a monopolist intermediary who lowers the probability of an unsuccessful trade. Seog (1999) offers a dynamic model and focuses on price search. Intermediation is found to solve adverse selection problems in insurance markets as illustrated by Biglaiser (1993) and Cummins and Doherty (2006).…”

Section: Literature Reviewmentioning

confidence: 99%

Miscounseling in Monopolistic Competition: A Case for Regulation

Hofmann¹,

Šaljanin²

2013

RES

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We analyze the impact of (possibly) fraudulent independent experts in a market for credence goods characterized by monopolistic competition. This setting applies to various industries such as repair markets, health care markets or financial services markets where consumers are usually uninformed about which product best fits their individual needs. Some consumers prefer to use an expert. We analyze market outcomes with honest and fraudulent experts, whereby honesty may require side payments from firms to experts. Rigorous regulation of the relationship between firms and experts may be essential in order to make these markets operate more efficiently.

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Section: Literature Reviewmentioning

confidence: 99%

Miscounseling in Monopolistic Competition: A Case for Regulation

Hofmann¹,

Šaljanin²

2013

RES

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“…However, in Posey and Yavas( 1995), the brokers' commission is exogenous and their advice quality is not modelled. Posey and Tennyson (1998) Seog (1999).…”

Section: Related Literaturementioning

confidence: 99%

Reinsurance Brokers and Advice Quality: Is There a Need for Regulation?

Sonnenholzner¹,

Friese

Schulenburg

2009

Geneva Risk Insur Rev

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Brokers play an increasing role in the distribution of reinsurance. In order to analyse reinsurance brokers' advice quality, we employ a model in which a monopoly broker advises cedents to buy a particular one out of similar reinsurance policies that cost the same but differ in details. The broker decides on how much to invest in his advice quality and on the price to charge for his service. We find that the broker's advice quality is generally lower and the price for his service higher than in the social optimum, even in the presence of a potential new entrant.

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“…In Taiwan's automobile 2 Joskow (1973); Cummins (1977); Cummins and VanDerhei (1979); Mayers and Smith (1981) ;Marvel (1982); Sass and Gisser (1989); Barrese and Nelson (1992); Blair and Herndon (1994); Kim et al (1996); Regan and Tennyson (1996);Regan (1997); Berger et al (1997); Regan and Tzeng (1999); Klumpes (2004); Klumpes and Schuermann (2011). 3 Posey and Yavas (1995); Kim et al (1996); Berger et al (1997); Posey and Tennyson (1998);Seog (1999); Venezia et al (1999);Trigo-Gamarra (2008). 4 Etgar (1976); Barrese and Nelson (1992); Barrese et al (1995); Kim et al (1996); Berger et al (1997);…”

Section: Introductionmentioning

confidence: 99%

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

Hsieh

Liu

Tzeng

2013

Geneva Pap Risk Insur Issues Pract

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Venezia, Galai and Shapira in 1999 proposed a theoretical framework that considers asymmetric information to explain the co-existence of the independent agent and direct underwriting systems in the insurance market. In separating equilibrium, high-risk clients tend to purchase insurance through independent agents, whereas low-risk clients prefer dealing directly with underwriters. Using a unique data set from Taiwan's automobile liability insurance, this paper tests the screening mechanism hypothesis proposed by Venezia, Galai and Shapira. The results reveal that a positive channel-claim correlation exists in the subsamples of cars aged more than three years. Significant positive channel-claim correlation indicates that high-risk policyholders prefer to purchase insurance from an independent agent, whereas those with lower risks tend to buy insurance from direct writer channels. The results support the screening mechanism hypothesis and demonstrate that marketing channel choice could serve as a screening mechanism in an insurance market characterised by asymmetric information.

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The Coexistence of Distribution Systems When Consumers Are Not Informed

Cited by 18 publications

References 16 publications

Miscounseling in Monopolistic Competition: A Case for Regulation

Miscounseling in Monopolistic Competition: A Case for Regulation

Reinsurance Brokers and Advice Quality: Is There a Need for Regulation?

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

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