Please note that tomorrow I will present the basic insurance model and do so in lecture format. I have decided to do that live rather than as a video, in part so you can ask questions then and there. This model will underlie other models well will consider over the next several weeks. The homework that is due a week from this Wednesday, on adverse selection in insurance markets, depends on it. Another homework on the principal-agent model can best be understood as a variant of the insurance model.
At this point it seems most of the class has yet to do the Excel homework due on Wednesday evening, which really should be preliminary to the insurance model. I'm going to push ahead anyway, in part so students get a chance to see where we are heading and in part because we really need to get this done.
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