TheBusinessProfessor
  • Home
  • Academy
  • SearchBase
  • Membership
    • Account
Select Page

Fundamental Law of Insurance

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Fundamental Law of Insurance?The major additional costs to insurance companies, other than the payment of claims, are the costs of running a business: the administrative costs of hiring workers, administering accounts, and processing insurance claims. For...

Risk Groups – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What are Risk Groups?Not all of those who purchase insurance face the same risks. Some people may be more likely, because of genetics or personal habits, to fall sick with certain diseases. Some people may live in an area where car theft or home robbery is more likely...

The Moral Hazard Problem

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Moral Hazard Problem?Moral hazard refers to the case when people engage in riskier behavior with insurance than they would if they did not have insurance. For example, if you have health insurance that covers the cost of visiting the doctor, you may be...

The Adverse Selection Problem

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is The Adverse Selection Problem?Adverse selection refers to the problem in which insurance buyers have more information about whether they are high-risk or low-risk than the insurance company does. This creates an asymmetric information problem for the insurance...

Oligopoly and the Prisoner’s Dilemma

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

How do Oligopolists face a Prisoner’s Dilemma? The members of an oligopoly can face a prisoner’s dilemma, also. If each of the oligopolists cooperates in holding down output, then high monopoly profits are possible. Each oligopolist, however, must worry that...
« Older Entries
Next Entries »

Designed by Elegant Themes | Powered by WordPress