A Game-Theoretic Analysis of the Sanctions for Breach of Duty to Disclose in Insurance Contracts: A Comparison of the “All or Nothing” and “Pro Rata” Methods-Reference-Cited by-同舟云学术

A Game-Theoretic Analysis of the Sanctions for Breach of Duty to Disclose in Insurance Contracts: A Comparison of the “All or Nothing” and “Pro Rata” Methods

Published:2022-08-05 Issue:3 Volume:13 Page:255-276
ISSN:2154-4611
Container-title:Asian Journal of Law and Economics
language:en
Short-container-title:

Author:

Okura Mahito¹,Sakaki Motohiro²,Yoshizawa Takuya³

Affiliation:

1. Doshisha Women’s College of Liberal Arts , Kyotanabe , Kyoto, 610-0395 , Japan

2. Graduate School of Law, Kobe University , Kobe , Hyogo , Japan

3. Faculty of Law, Kyoto Sangyo University , Kyoto , Kyoto , Japan

Abstract

Abstract Using a game-theoretic analysis, this study aims to investigate which of the “all or nothing” and “pro rata” methods, regarding the sanction against the breach of duty to disclose in insurance contracts by negligence, is better from two perspectives: one is in terms of how much the sanction increases the policyholder’s probability of effort, while the other is how much it increases the probability of finding the wrong type of policyholder by insurance firms. From the analysis, we find that the desirable method depends on the probability that the policyholders can effortlessly determine their precise risk type as well as their effort cost level.

Funder

JSPS KEKENHI

Publisher

Walter de Gruyter GmbH

Subject

Law,Economics, Econometrics and Finance (miscellaneous)

Link

https://www.degruyter.com/document/doi/10.1515/ajle-2021-0062/pdf

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