Suppose all free riders make positive profits.
This would preserve separation and yet this insurer would now make positive profits.
Second, we show that this market structure is compatible with other equilibria where also the insurer serving the high risks makes positive profits.13.13
Namely, they focused on an equilibrium where only insurers attracting low risks make positive profits (p. 400), whereas we show existence of an equilibrium where all insurers make positive profits and all individuals are worse-off –even the high risks– as compared to the laissez faire.
When the firms do not place any weight on revenue (β = 0), the condition under (14) implies that γ ≤ 1/(s + 1), meaning that the firms will always make positive profits if they produce complementary services (s < 0).
Let us start by showing in Fig. 12 that the equilibrium suggested by NP, where only insurers attracting low risks make positive profits, can also be sustained as a CNE.
Clearly, he must make positive profit per worker (p y)>w ⋆) R y, 1) = frac{p y) - w^{star}}{r + 2mu + delta - h} □.
Investors are increasingly pressuring companies to adjust their focus from maximizing shareholder profits to also making positive societal contributions.
And this month many big lenders have made positive noises about profits so far this year.
Insurers offering (L_{np}) only attract low risks and make some positive profits per insuree.
