IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v57y2021i14p3984-4003.html
   My bibliography  Save this article

Marketization, Competition, and Insurance Pricing: The Comprehensive Evidence from China

Author

Listed:
  • Yunpeng Wang
  • Jingxin Sun
  • Chun-Ping Chang

Abstract

As a typical deviation from profit-maximizing, the revenue-maximizing behavior has explained the strategy of firms in many industries. This research first looks into the Chinese non-life insurance market and finds evidence of revenue-maximizing behavior of the non-life insurers. We construct a model based on game theory to reflect the revenue-maximizing behavior and calculate the Nash equilibrium of the game. The research finds that revenue-maximizing players will incur operation loss in the game; the insurers with less competitive strength will suffer more loss. The theoretical results are hence applied tests by case study on Chinese auto insurance industry. The panel cointegration test and the regression results reveal that a more liberalized regulatory regime will result in a lower price, while large insurers tend to take advantage of their market power to price at a higher level than smaller insurers, this finding corresponding to the result of our theoretical model.

Suggested Citation

  • Yunpeng Wang & Jingxin Sun & Chun-Ping Chang, 2021. "Marketization, Competition, and Insurance Pricing: The Comprehensive Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(14), pages 3984-4003, November.
  • Handle: RePEc:mes:emfitr:v:57:y:2021:i:14:p:3984-4003
    DOI: 10.1080/1540496X.2020.1771304
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2020.1771304
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/1540496X.2020.1771304?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huimin Li & Jianyuan Huang & Jiayun Liu, 2022. "External Support for Elderly Care Social Enterprises in China: A Government-Society-Family Framework of Analysis," IJERPH, MDPI, vol. 19(14), pages 1-22, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:57:y:2021:i:14:p:3984-4003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.