TY  - JOUR
TI  - Insuring Nonverifiable Losses
AB  - Insurance contracts are often complex and difficult to verify outside the insurance relation. We show that standard one-period insurance policies with an upper limit and a deductible are the optimal incentive-compatible contracts in a competitive market with repeated interaction. Optimal group insurance policies involve a joint upper limit and individual deductibles; insurance brokers can play a role implementing such contracts for their clients. Our model provides new insights and predictions about the determinants of insurance. 
DO  - http://dx.doi.org/10.1093/rof/rft056
SP  - 283
EP  - 316
UR  - http://rof.oxfordjournals.org/content/19/1/283.abstract
PY  - 2015-01-01
JO  - Review of Finance
AU  - Doherty, Neil 
AU  - Laux, Christian 
AU  - Mürmann, Alexander 
ER -