Template-Type: ReDIF-Paper 1.0
Title: Data Linkage Between Markets: Does Emergence of an Informed Insurer Cause Consumer Harm?
Author-Name: Claudia Herresthal
Author-Email: claudia.herresthal@uni-bonn.de
Author-Name: Tatiana Mayskaya
Author-Email: tmayskaya@gmail.com
Author-Name: Arina Nikandrova
Author-Email: a.nikandrova@gmail.com
Classification-JEL: D4, D82, G22, L22, L41, L86
Keywords:  insurance market, asymmetric information, data linkage, digital market


Abstract:  A merger of two companies active in seemingly unrelated markets creates data linkage: 
by operating in a product market, the merged company acquires an informational
advantage in an insurance market where companies compete in menus of contracts. In
the insurance market, the informed insurer earns rent through cream-skimming. Some of
this rent is passed on to consumers in the product market. Overall, the data linkage makes
consumers better off when the insurance market is competitive and, under some conditions, 
even when the insurance market is monopolistic. The role of competitiveness of the
product market and the data-sharing requirement are discussed.



Note: 
Length: 80
Creation-Date: 2023-09
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp462
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_462