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This report examines possible outcomes of greater competition in insurance markets. The report describes the nature of insurance offerings in equilibrium if firms offer multiple policies; but it replaces the conventional assumption that each policy must earn nonnegative profits with the more realistic requirement that the portfolio of policies offered by the firm earn nonnegative profits in the aggregate. Theorems regarding the existence, optimality, and uniqueness of the subsidy equilibrium are presented, together with a simple characterization of the subsidy equilibrium and a comparison with existing equilibrium notions. Because the subsidy patterns, from low to high, that emerge under this formulation appear to characterize multiple-option insurance plans such as the Federal Employees Health Benefits Plan, this model may be more useful than conventional methods in the analysis of such plans.

Insurance --- Equilibrium (Economics) --- Adverse selection (Insurance) --- Mathematical models.

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This report describes methods for setting priorities among research projects, particularly those related to food safety. The underlying principle is that research projects should be evaluated in terms of the "expected value of information." Using this approach, research results are valued to the extent that they enable government, food producers, and consumers to alter their behavior and ultimately their food consumption patterns in ways that improve social welfare. Two classes of methods are presented, involving subjective ratings on multiattribute scales and probabilistic modeling of research outcomes. These methods are illustrated by application to two case studies: aflatoxin contamination of grains and dichloromethane residues in decaffeinated coffee.

Food industry and trade --- Safety measures --- Research.