The Vertical Differentiation Model in the Insurance Market: Costs Structure and Equilibria Analysis

Authors

  • Denis V. Kuzyutin Saint Petersburg State University
  • Maria V. Nikitina Higher School of Economics
  • Nadezhda V. Smirnova Higher School of Economics
  • Ludmila N. Razgulyaeva Higher School of Economics

Abstract

We investigate the vertical differentiation model in the insurance market taking into account fixed costs (the costs of quality improvement) of different structure. The subgame perfect equilibrium in a two-stage game is constructed for the case of compulsory insurance when firms use Bertrand-Nash or Stakelberg equilibria at the stage of price competition. For the case of optional insurance we explore and compare the firms optimal behavior in monopoly and duopoly settings.

Keywords:

vertical differentiation model, insurance, equilibrium, quality, duopoly, monopoly pricing, fixed costs

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References

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Published

2022-05-24

How to Cite

V. Kuzyutin, D., V. Nikitina, . M., V. Smirnova, N., & N. Razgulyaeva, L. (2022). The Vertical Differentiation Model in the Insurance Market: Costs Structure and Equilibria Analysis. Contributions to Game Theory and Management, 8. Retrieved from https://gametheory.spbu.ru/article/view/13457

Issue

Vol. 8 (2015)

Section

Articles

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Articles of "Contributions to Game Theory and Management" are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.