Restraint Mechanism For Adverse Selection Behavior In Insurance Market

The insurance market is a typical market with asymmetric information.Information asymmetry is a necessary condition for the formation of insurance fraud.A large number of studies discuss insurance fraud from the perspective of information asymmetry.Comparatively speaking,most of these studies focus on ex-post information asymmetry(moral hazard behavior),while less attention is paid to ex-ante information asymmetry(adverse selection behavior).In addition,signal transmission mechanism has been widely used in many fields of adverse selection behavior constraint research,but in the field of insurance,there are many researches on the use of information screening mechanism,and the application of signal transmission mechanism is not enough.Therefore,this thesis focuses on the adverse selection behavior in the insurance market,studies how to use the signal transmission mechanism to constrain it,and provides new ideas and enlightenment for the anti-fraud research in the insurance field.In this thesis,signal transmission game is used to establish and optimize the signal transmission mechanism of insurance market to constrain adverse selection behavior.Firstly,this thesis constructs and solves the signal transmission game model between insurance company and insured,analyzes the boundary conditions and causes of the two kinds of different equilibrium results of the game: separating equilibrium and pooling equilibrium(the signal transmission mechanism takes effect under separating equilibrium,while the signal transmission mechanism fails under pooling equilibrium),and provides solution ideas and solutions for the optimization of signal transmission mechanism.Secondly,this thesis introduces two ex-ante inspection strategy to optimize the mechanism,so that a part of the pooling equilibrium can re-enter the separating equilibrium.The optimal inspection ratio of the two strategies is solved,and the two strategies are compared and analyzed in three aspects,such as optimization effect,and suggestions are put forward for insurance companies to select appropriate ex-ante inspection strategies for mechanism optimization.Finally,this thesis focuses on the insurance market that still falls into pooling equilibrium after mechanism optimization,analyzes the ex-ante inspection strategy and the ratio of ex-ante inspection that maximizes the expected revenue of insurance companies under different conditions,and discusses how insurance companies should select appropriate ex-ante inspection strategy according to the market type when relevant parameters change,so as to avoid serious adverse selection problems in the market.This thesis shows that the key to the two kinds of equilibrium results is the relationship between the disguised cost of the high-risk insured and the expected return difference brought by adverse selection behavior.The introduction of the two ex-ante inspection strategies can improve the conditions required for the market to enter the separating equilibrium,so as to optimize the signal transmission mechanism,and the optimization effect of the two-stage inspection strategy is better than that of random sampling strategy.To maximize the expected revenue of insurance companies under the pooling equilibrium,different ex-ante inspection strategies have their own applicable conditions,which are jointly determined by the disguised effort level and the ratio of high-risk insured and other parameters.On the one hand,the research of this thesis makes up for the deficiency of relevant anti-fraud research,on the other hand,it also innovates the application method of signal transmission mechanism,provides a new idea for related research,and has certain theoretical significance.In addition,this study provides relevant enlightenment for insurance companies to select signals and conduct ex-ante inspection to constrain adverse selection behavior,which has certain practical significance.