On endogenous cost of altruism

Resumo

The paper extends the cost of altruism model, analyzed in Lisboa (1999). There are three types of agents: households, providers of a service and insurance companies. Households have uncertainty about future leveIs of income. Providers, if hired by a household, have to choose a non-observable leveI of effort, perform a diagnoses and privately learn a signal. For each signal there is a procedure that maximizes the likelihood of the household obtaining the good state of nature. Finally, insurance companies offer contracts to both providers and households. The paper provides suflicient conditions for the existence of equilibrium and shows the optimal contract induces providers to care about their income and also about the likelihood households will obtain the good state of nature, which in Lisboa (1999) was stated as altruism assumption. Equilibrium is inefficient in comparison with the standard moral hazard outcome whenever high leveIs of effort is chosen precisely due to the need to incentive providers to choose the least expensive treatment for some signals. We show, however that an equilibrium is always constrained optimal.

Ficha do documento

Tipo

Estudo

Ano

1999

Instituição

Escola de Pós-Graduação em Economia da FGV

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Não informado

Identificador

oai:repositorio.fgv.br:10438/12230

Temas

EconomiaSaúde

Palavras-chave

EconomiaSeguro-saúde