Thursday, October 31, 2002

"Americans Head to Mexico to Buy Cut-Rate Drugs", WSJ October 24, 2002. [Categories: Insurance, Market Definition, Price Discrimination] 3:46:59 PM    comment []

"Chubb Extends Family Protection: Coverage for Kidnapping, Carjacking, Other Crimes To Be Rolled Out Nationally", WSJ October 23, 2002. What would adverse selection and moral hazard mean with respect to family protection insurance?  Who buys this insurance? Is there a significant adverse selection of families who purchase family protection?   This policy is only sold bundled with premium home owner's insurance.  Is this important? Why doesn't Chubb's policy cover ransoms?  Explain why this would lead to an incentives / moral hazard problem that could make this coverage less profitable. [Categories: Adverse Selection, Insurance, Moral Hazard, Price Discrimination (Bundling)] 3:45:32 PM    comment []

"Totally Wired at 32,000 Feet: Airlines Set to Install E-Mail, Web Links for Use In Flight", WSJ October 24, 2002. By offering "JetConnect" services at the low price of $6.00 for a flight, Continental seems to have shifted to an approach that aims to induce high- and low-demanders to purchases these services (Approach 2 in my terminology) rather than price very high to only attract high-demanders (Approach 1, such as charging $4.00 per minute on Airfone).  Could airlines do better by offering a menu of choices (Approach 3)?  What offerings and price points might you suggest?  [Categories: Airlines, Price Discrimination] 3:37:14 PM    comment []