TY  - RPRT
        AU  - Cannon, Edmund
AU  - Cipriani, Giam Pietro
AU  - Bazar-Rosen, Katia
        TI  - Surprising Selection Effects in the UK Car Insurance Market
        PY  - 2014/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8172
        UR  - https://www.iza.org/publications/dp8172
        AB  - We document a large and persistent anomaly in the UK car insurance market over the period 2012-13: insurance companies charged a higher premium for third-party (liability) insurance than comprehensive insurance (which includes third-party). Furthermore, some companies charged higher prices for comprehensive policies with larger deductibles. This evidence suggests both that consumers are too confused or too poorly informed to arbitrage and that sellers of car insurance do not implement the incentive-compatibility constraints at the heart of the adverse-selection model of insurance. This particular insurance market is much less sophisticated than that characterised by modern microeconomic theory.
        KW  - bounded rationality
KW  - adverse selection
KW  - car insurance
        ER  -