The Development Of The Insurance Industry And Related Games

Since the reform and opening-up, insurance industry has attained a great achievement in China. Due to the close-down of the domestic insurance industry for a long time, however, both the insurance practice and the study on insurance economics in our country are lagging now, especially applying the standardized economic norm to the analysis of insurance problems, which is almost blank in academe. As china has become a formal member of WTO and begins to fulfill her promise of market-admittance, domestic insurance market will be confronted the entry of foreign insurance companies, by the time the competition will be more intense. Under such background, this paper intends to combine the application of the popular economic analysis tool, game theory, with the practice of Beijing insurance industry to analyze a few insurance problems in order to make some helpful attempts.Firstly, from the perspective of insurance practice, this paper examines the status quo of Beijing commercial insurance market, its exiting problems and the trend of development. And its emphases are placed on the market structure, competition status, insurance organization, insurance supply and demand, regulatory system and so forth. Then combining the status quo and trends of Beijing insurance industry, this paper presents a market game model based on Stackelberg Model and another model concerning deductible insurance, respectively, and also gives the possible equilibria under various conditions and assumptions.In the first model, under such assumptions that domestic insurance company has information advantage over the foreign one, and that both players are endowed with limited capacity of learning, this paper analyzes the market game between domestic and foreign insurance companies in the case of single and multi-periods, respectively. It shows that the premiums strategy of domestic company in single period is significantly different from that in multi-periods, and that it cannot effectively prevent the rivals from entering and making profit.The second model, under complete information assumption and by means of a complete dynamic model, gives a subgame refinement nash equilibrium, and then based on the model, this paper introduces incomplete information and analyzes the possible Bayesian refinement equilibrium in a simple message game. The primary study reveals that it exists separate equilibrium (one of Bayesian refinement equilibria), which means in the case of incomplete information insurance contract can be reached.