Adverse Selection
101Insurable risk — An insurable risk is a risk that meets the ideal criteria for efficient insurance. The concept of insurable risk underlies nearly all insurance decisions.For a risk to be insurable, several things need to be true:* The insurer must be able to… …
102Equity premium puzzle — The equity premium puzzle is a term coined by economists Rajnish Mehra and Edward C. Prescott. It is based on the observation that in order to reconcile the much higher return on equity stock compared to government bonds in the United States,… …
103Health care in the United States — ] Current estimates put U.S. health care spending at approximately 15.2% of GDP, second only to the tiny Marshall Islands among all United Nations member nations. The health share of GDP is expected to continue its historical upward trend,… …
104Mortgage-backed security — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security …
105Agency cost — An agency cost is an economic concept on the cost incurred by an organization that is associated with problems such as divergent management shareholder objectives and information asymmetry. The costs consist of two main sources: 1. The costs… …
106Overconfidence effect — The overconfidence effect is a well established bias in which someone s subjective confidence in their judgments is reliably greater than their objective accuracy, especially when confidence is relatively high.[1] For example, in some quizzes,… …
107New institutional economics — (NIE) is an economic perspective that attempts to extend economics by focusing on the social and legal norms and rules that underlie economic activity. Contents 1 Overview 2 Institutional levels 3 Notes …
108Christian Gourieroux — is an econometrician who holds a Doctor of Philosophy in Mathematics from the University of Rouen. He has the Professor exceptional level title from France. Mr. Gourieroux spends six months from every year teaching at the University of Toronto,… …
109Constrained Pareto efficiency — The condition of Constrained Pareto optimality is a weaker version of the standard condition of Pareto Optimality employed in Economics which accounts for the fact that a potential planner (i.e. the government) may not be able to improve upon a… …
110Credibility theory — is a branch of actuarial science. It was developed originally as a method to calculate the risk premium by combining the individual risk experience with the class risk experience. When an insurance company calculates the premium it will charge,… …
