Bodil O. Hansen

Alternative health insurance schemes: a welfare comparison

In this paper, we present a simple model of health insurance with asymmetric information, where we compare two alternative ways of organizing the insurance market. Either as a competitive insurance market, where some risks remain uninsured, or as a compulsory scheme, where however, the level of reimbursement of loss is to be determined by majority decision. In a simple welfare comparison, the compulsory scheme may in certain environments yield a solution which is inferior to that obtained in the market. We further consider the situation where the compulsory scheme may be supplemented by voluntary competitive insurance; this situation turns out to be at least as good as either of the alternatives.

Revenue Sharing in European Football Leagues: A Theoretical Analysis

In the present chapter, a general model of competition between clubs in sports leagues with flexible supply of inputs is studied. There are externalities between clubs because it takes more than one club to produce games and tournaments. It is assumed that the externalities take the form of complementarities. Firstly, it is shown that revenue sharing leads to lower overall quality of sports leagues. Secondly, it is shown that the optimal quality for the league is lower (higher) than the quality in a league without revenue sharing in case of negative (positive) externalities between clubs. Thirdly an example is used to illustrate the findings.

Equilibria in a Random Viewer Model of Television Broadcasting

The authors considered a model of commercial television market with advertising with probabilistic viewer choice of channel, where private broadcasters may coexist with a public television broadcaster. The broadcasters influence the probability of getting viewer attention through the amount that they spend on programming, so that their advertising capacity depends on their own program outlays as well as on those of their competitors. A larger number of broadcasters will reduce overall capacity even when total program outlays are kept fixed, because the attention of viewers is split among a larger number of channels. The authors derive properties of equilibrium in an oligopolistic market with private broadcasters and show that the number of firms has a negative effect on overall advertising and viewer satisfaction. If there is a public channel that also sells advertisements but does not maximize profits, this will have a positive effect on advertiser and viewer satisfaction.

How Likely is Factor Price Equalization

The idea of treating factor price equalization as a situation, where the distribution of factors among countries is compatible with an equilibrium in an integrated world economy, has been refined to give the so-called lens condition for factor price equalization. In this paper, we show that the lens condition may be used to give estimates for the probability of factor price equalization when factors are distributed randomly among countries and, in addition, the techologies are sampled according to a given probability distribution. The estimates indicate that factor price equalization may occur less often than intuitively conceived.