European Business Schools Librarian's Group

ESSEC Working Papers,
ESSEC Research Center, ESSEC Business School

No WP1305: Switching costs in competitive health insurance markets

Karine Lamiraud ()
Additional contact information
Karine Lamiraud: ESSEC Business School, Postal: Avenue Bernard Hirsch - B.P. 50105, 95021 CERGY-PONTOISE Cedex, FRANCE,

Abstract: In this paper we investigate the possible presence of switching costs when consumers are offered the opportunity to change their basic health insurance provider. We focus on the specific case of Switzerland which implemented a pure form of competition in basic health insurance markets. We identify several barriers to switching, namely choice overload, status quo bias, the possession of supplementary contracts for enrollees in bad health, firm’s pricing strategies based on providing low price supplementary products, poor regulation of reserves and the limitations of the previous risk-equalization mechanism which left room for risk selection practices.

Keywords: Brand loyalty; Choice overload; Competition among health insurers; Status quo bias; Supplementary health insurance; Switching costs; The Swiss case

JEL-codes: D41; G22; I13

15 pages, February 2013

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WP1305.pdf PDF-file 

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