@article{Quiggin:151182,
      recid = {151182},
      author = {Quiggin, John and Chambers, Robert G.},
      title = {Bargaining power and efficiency in insurance contracts},
      address = {2005-04-01},
      number = {1744-2016-140827},
      series = {Risk and Uncertainty Program},
      pages = {21},
      month = {Apr},
      year = {2005},
      abstract = {Insurance contracts are frequently modelled as  principal--agent relationships. Although it is commonly  assumed that the principal, in this case the insurer, has  complete freedom to design the contract, the problem  formulation in much of the principal--agent literature  presumes that the contract is constrained-Pareto-efficient.  In the present paper, we consider the implications of a  richer specification of the choices available to clients.  In particular, we consider the entire spectrum of possible  power differentials in the contracting relationship between  insurers and clients. Our central result is that the agent  can exploit information asymmetries to offset the  bargaining power of the insurer, but that this process is  socially costly.},
      url = {http://ageconsearch.umn.edu/record/151182},
      doi = {https://doi.org/10.22004/ag.econ.151182},
}