Economics · Microeconomics

Insurance Markets Lab — Adverse Selection and Moral Hazard

Run a health-insurance pool that unravels in real time, then design the institutional fix.

9 rounds Executive English, Español

Preview

About this simulation

Run a health-insurance pool that unravels in real time, then design the institutional fix. Three rounds: build the adverse-selection death spiral (Akerlof 1970, Rothschild-Stiglitz 1976); add moral hazard and find the Zeckhauser (1970) cost-sharing optimum (RAND HIE); pick a combination of four mechanism levers (mandate, risk-rating, cost-sharing, managed care) and brief the regulator. Closes Track 2A.

Who it is for

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.

How a session runs

  1. The instructor creates a session from the Eureka dashboard and invites the participants.
  2. Participants play 9 rounds. In each one they submit their decisions and the simulation calculates the results. The first round opens with: Set Posted Premium.
  3. The simulation can be run in English, Español.
  4. The instructor follows each participant's progress and results from the dashboard, and uses the class results for the debrief.

Decisions participants make

The decisions participants make during the simulation:

  • Posted Annual Premium (€)
  • Coinsurance Rate (%) — share the consumer pays at point of use
  • M1 — Mandatory Enrollment (with subsidies for low-income)
  • M2 — Risk-Rated Premiums (age, ZIP, smoking status)
  • M3 — Cost-Sharing / Coinsurance (%)
  • M4 — Managed Care (networks, prior authorization, capitation)

What participants track

What participants follow on screen as the rounds go by:

  • Pricing Committee Decisions

Subjects covered

Designed for courses in Microeconomics.

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