Risky business : why insurance markets fail and what to do about it

Risky business Why insurance markets fail and what to do about it

Liran Einav

Book - 2022

"An engaging and accessible examination of what ails insurance markets--and what to do about it--by three leading economists. Why is dental insurance so crummy? Why is pet insurance so expensive? Why does your auto insurer ask for your credit score? The answer to these questions lies in understanding how insurance works. Unlike the market for other goods and services--for instance, a grocer who doesn't care who buys the store's broccoli or carrots--insurance providers are more careful in choosing their customers, because some are more expensive than others. Unraveling the mysteries of insurance markets, Liran Einav, Amy Finkelstein, and Ray Fisman explore such issues as why insurers want to know so much about us and wheth...er we should let them obtain this information; why insurance entrepreneurs often fail (and some tricks that may help them succeed); and whether we'd be better off with government-mandated health insurance instead of letting businesses, customers, and markets decide who gets coverage and at what price. With insurance at the center of divisive debates about privacy, equity, and the appropriate role of government, this book offers clear explanations for some of the critical business and policy issues you've often wondered about, as well as for others you haven't yet considered.:--

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Subjects
Insurance > United States.
Insurance.
Insurance exchanges.
United States.
Published
New Haven : Yale University Press [2022]
Language
English
Main Author
Liran Einav (author)
Other Authors
Amy Finkelstein (author), Raymond Fisman
Physical Description
271 pages ; 23 cm
Bibliography
Includes bibliographical references and index.
ISBN
9780300253436
  • Prologue : Overlooked no more
  • Part I : Setting the scene. Death of a market ; Into the wild ; The two-thousand-year-old market
  • Part II : Much ado about selection. The price isn't right ; Opening the chamber of secrets
  • Part III : Enter the government. Eat your broccoli! ; You can't do that! ; Business gets the last move
  • Epilogue : Selection markets here, there, and everywhere.
Review by Choice Review

Buying insurance can seem like a daunting task even for those who work in the industry. The markets for insurance can also seem as esoteric as the wording in the policies purporting to protect holders (despite the various exclusions written into them). In Risky Business, the authors explore the economics of the insurance market, including the concept of hidden information, which is the linchpin for understanding the industry. Economics and insurance concepts are explained in plain English through a very well-organized ride that is both eye-opening and comprehensible. The authors even make the Supreme Court's decision on the Affordable Care Act entertaining and explain why broccoli played a part in that ruling. This leads to a discussion of whether Americans would be better off with government-mandated insurance and how adverse selection would be affected. Risky Business closes with a final discussion of selection markets. It opens the door to a potential sequel (should the authors get around to it) by including a brief overview of other selection markets, such as education and credit. Summing Up: Recommended. All readership levels. --Ryan I. Saltz, independent scholar

Copyright American Library Association, used with permission.

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