What Is the Necessary Condition(s)for Efficient Insurance Markets

question 18

Multiple Choice

What is the necessary condition(s) for efficient insurance markets?

• A)Large number of insurable events.
• B)Sufficient experience regarding events so that insurance companies can reliably estimate losses.
• C)The insurance must be relatively free of moral hazard.
• D)A and B are necessary conditions.
• E)All of the above are necessary conditions.

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Definitions:

Negotiator

A person skilled in conducting discussions and reaching agreements between parties with differing interests.

Win-lose Strategy

A competitive strategy where one party's gain is perceived to be at the other party's loss, emphasizing conflict over cooperation.

Irrational Behavior

Actions or decisions that lack logic or reason, often influenced by emotions, misunderstandings, or cognitive biases.

Win-win Agreement

A negotiation result where all parties involved gain benefits or a satisfactory outcome, ensuring a positive situation for everyone.