Asymmetric Learning in Repeated Contracting: An Empirical Study

A-Tier
Journal: Review of Economics and Statistics
Year: 2012
Volume: 94
Issue: 2
Pages: 419-432

Authors (1)

Score contribution per author:

4.036 = (α=2.02 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper uses a unique panel data set of an insurer's transactions with repeat customers. Consistent with the asymmetric learning hypothesis that repeated contracting enables sellers to obtain an informational advantage over their rivals, I find that the insurer makes higher profits in transactions with repeat customers who have a good claims history with the insurer, the insurer reduces the price charged to these repeat customers by less than the reduction in expected costs associated with such customers, and repeat customers with bad claim histories are more likely to flee their record by switching to other insurers. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Technical Details

RePEc Handle
repec:tpr:restat:v:94:y:2012:i:2:p:419-432
Journal Field
General
Author Count
1
Added to Database
2026-01-25