Information Asymmetry on the Czech Insurence Market
Zdeněk Rybák
The goal of this paper is to describe the problem of information asymmetry within the commercial insurance market of the Czech Republic. At first, the paper focuses on the history and theoretical definition of information asymmetry. It is regarded as one of the market failures that may have possible negative impacts into production or consumption. Negative impact of asymmetry is also described by the micro-economic model of Michael Rothschild and Joseph E. Stiglitz, who analyzed the impact of it on market equilibrium. Then paper focuses on the current situation within the insurance market, which is modelled with three participants (client, broker and insurance company). Paper covers forms of asymmetry by each participant, sources of asymmetry, motivation for asymmetry and concrete examples of information asymmetry. Finally the paper also provides available data which can express the current situation in the Czech Republic and provides actually applied solutions for solving the information asymmetry problem. There are also mentioned specific issues, which are related to information asymmetry – lack of financial education and problem of privacy.
JEL klasifikace: D81, F61, G22, G32
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