Asymmetric Information and Learning: Evidence from the Automobile Insurance Market

@article{Cohen2005AsymmetricIA,
  title={Asymmetric Information and Learning: Evidence from the Automobile Insurance Market},
  author={A. Cohen},
  journal={Torts & Products Liability Law},
  year={2005}
}
  • A. Cohen
  • Published 2005
  • Economics
  • Torts & Products Liability Law
  • This paper tests the predictions of adverse-selection models using data from the automobile insurance market. I find that, in contrast to what recent research suggests, the evidence is consistent with the presence of informational asymmetries in this market: new customers choosing higher insurance coverage are associated with more accidents. Consistent with the possibility of policyholders' learning about their risk type, such a coverage-accidents correlation exists only for policyholders with… CONTINUE READING
    127 Citations
    Asymmetric Information and Learning: Evidence from the Automobile Insurance Market
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