SMU SOE Seminar (November 15, 2023): Designing Monitoring Programs

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ABSTRACT I study the design of voluntary consumer monitoring programs in auto-insurance, using data from more than 2 million unique drivers. Monitoring technology tracks driving behaviors and provides performance incentives for improved driving, in the form of discounts on future premiums. The efficacy of these programs depends on who chooses to participate and their ability to influence driver risk. Because drivers anticipate performance incentives when making their participation decision, these goals are fundamentally tied. I estimate a model with both selection and moral hazard using unique variation in both performance and participation discounts. Through the lens of the model, I non parametrically recover the joint distribution of drivers risk characteristics. I use my model to perform two counterfactuals of interest. First, I separate the screening and risk adjustment effects and estimate the welfare of monitoring programs in this setting. Second, I examine how varying incentive structures screen different types of drivers into the programs. Click here to view the CV.
		PRESENTER Samuel Goldberg Stanford Graduate School of Business
		RESEARCH FIELDS Empirical Industrial Organization Quantitative Marketing
		DATE: 15 November 2023 (Wednesday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903