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An Evaluation of the Degree of Competition in the French Life Insurance Industry

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  • Gagnepain, Philippe
  • Ivaldi, Marc

Abstract

This article focuses on the life insurance industry in France and attempts to shed light on whether the insurers behave in a competitive fashion, or whether, on the contrary, they take coordinated decisions. We propose several empirical tests, which entail the estimation of the Boone indicator, a tool which explores the relationship between firms’ relative costs and profits, the evaluation of the switching costs beard by consumers when they decide to change insurer, and the construction of a structural model, which is based on an oligopolistic framework where insurers propose differentiated products. Our results suggest unambiguously that firms do follow a competitive behavior.

Suggested Citation

  • Gagnepain, Philippe & Ivaldi, Marc, 2016. "An Evaluation of the Degree of Competition in the French Life Insurance Industry," TSE Working Papers 16-697, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:30840
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    References listed on IDEAS

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    9. Harold Creusen & Bert Minne & Henry van der Wiel, 2006. "Measuring competition in the Netherlands," CPB Memorandum 163, CPB Netherlands Bureau for Economic Policy Analysis.
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    11. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 375-394.
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    Cited by:

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