California provides earthquake insurance. Because the state agency in charge has few staff members, it pays private
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California provides earthquake insurance. Because the state agency in charge has few staff members, it pays private insurance carriers to handle claims for earthquake damage. These insurance firms receive 9% of each approved claim. Is this compensation scheme likely to lead to opportunistic behavior by insurance companies? Explain. What would be a better way to handle the compensation?
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Related Book For
Microeconomics Theory And Applications With Calculus
ISBN: 9780133019933
3rd Edition
Authors: Jeffrey M. Perloff
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