Uncertainty and the Welfare Economics of Medical Care.

Arrow, K. J. (1963). Uncertainty and the Welfare Economics of Medical Care. American Economic Review, 53(5), 941-973.

Type

Journal article

Intellectual base

Primary research

Year

1963

Volume

53

Issue

5

Pages

941-973

Link

https://assets.aeaweb.org/asset-server/files/9442.pdf

Cited from

economics_finance

Cited by

5 citations across 5 artifacts.

Each citation links to the sentence it supports in the citing article.

Primes

• Information Asymmetry
  • Under information asymmetry, the fact exists and is held — the applicant knows their own health history; the insurer does not.
• Moral Hazard
  • The formalization by Arrow (1963)
• Risk Pooling
  • A farmer who pools with an agricultural cooperative must accept the cooperative's average yield (good years and bad years average together); in isolation, the farmer experiences full volatility but full autonomy.

Mechanisms

• Accountability-Link Audit
  • The named hazard underneath is moral hazard: when an inflow insulates an actor from the consequences of poor performance, the incentive to perform decays even while the capability to perform is still intact.

    This sourceExplains moral hazard as reduced incentives for care or performance when insurance or another arrangement shields an actor from the consequences of their choices.

• Secondary-Capacity Reserve Activation
  • A guaranteed backstop can also breed moral hazard

    This sourceExplains moral hazard as the change in incentives and behavior produced when insurance shifts or cushions risk.

Verification

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Links previously used in the corpus

Before the registry existed this work was also linked 1 other way.

• https://www.jstor.org/stable/1812044 ×1

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