A kinetic games framework for insurance plans

Daniel Brinkman, Christian Ringhofer

Research output: Contribution to journalArticle

Abstract

The dynamics of insurance plans have been under the microscope in recent years due to the controversy surrounding the implementation of the Affordable Care Act (Obamacare) in the United States. In this paper, we introduce a game between an insurance company and an ensemble of customers choosing between several insurance plans. We then derive a kinetic model for the strategies of the insurer and the decisions of the customers and establish the conditions for which a Nash equilibrium exists for some specific customer distributions. Finally, we give some agent-based numerical results for how the plan enrollment evolves over time which show qualitative agreement to "experimental" results in the literature from two plans in the state of Massachusetts.

Original languageEnglish (US)
Pages (from-to)93-116
Number of pages24
JournalKinetic and Related Models
Volume10
Issue number1
DOIs
StatePublished - 2017

Keywords

  • Agent-based simulation
  • Insurance
  • Kinetic equations
  • Nash equilibrium
  • PDE modeling

ASJC Scopus subject areas

  • Numerical Analysis
  • Modeling and Simulation

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