premise 1: the timespan of an insurer that undercharges defaulting is long compared to the timespan of consumers switching providers
premise 2: consumers are incapable (or unwilling) of estimating the default risk of their provider
conclusion: the equilibrium state of the insurance market is one where insurers universally undercharge and regularly default
Are my premises incorrect?
If not, is my conclusion actually true?
If not, why?
premise 2: consumers are incapable (or unwilling) of estimating the default risk of their provider
conclusion: the equilibrium state of the insurance market is one where insurers universally undercharge and regularly default
Are my premises incorrect?
If not, is my conclusion actually true?
If not, why?
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