[Seminar] Insurance Design in the Presence of Safety Nets
Speaker: Dr. Tse-Ling Teh（Post-doc, Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science）
Speaker Intro: Dr. Tse-Ling Teh's personal website
Host: Prof. Nan Zhong
Date: Oct. 13, 2016 (Thursday)
Venue: N303, Econ Building
Description: Safety net assistance and insurance exist to manage risk and improve welfare. This shared goal may lead to crowding out. In a new approach, this paper analyzes the interaction of assistance with two dimensions of insurance design: level of coverage and types of risks covered. In a society of risk averse vulnerable individuals and risk neutral assistance providers, Pareto improvements in welfare are achieved through incompleteness in the types of risks covered. The results imply that safety nets promote demand for and the emergence of incomplete insurance. These results have a wide application to insurance markets where safety nets are available, including health care, disaster aid and social welfare.