Resumen del estudio: Big data and machine learning allow insurers to infer statistical information, which reverses informational advantage from the insuree to the insurer. Using a simple model, we derive three results: First, the insurer offers only a few contracts because of a novel tradeoff between belief gap and price discrimination. Second, if agents are not rational, the insurer boosts profits by misleading the insurees. Third, competition reduces the insurer’s informational advantage, and forcing the insurer to reveal information can insuree’s welfare even though total surplus might reduce. We relate our analysis to the merits of consumer activism, regulatory forbearance, and the use of public data repositories.
Expositor: Carlos Segura Rodríguez
Institución: Banco Central de Costa Rica
Modalidad: Virtual
Fecha del evento: viernes 3 de noviembre, 12m.d
Transmisión en FB Live, Instituto de Investigaciones en Ciencias Económicas.