How to reduce the moral hazard problem


Suppose a study found that the elasticity of demand for hair loss treatment visits was -0.96 and that the elasticity of demand for asthma treatment visits was -0.05. You are in charge of setting coinsurance rates for an insurance company's policies. For which type of treatment would you set a higher coinsurance rate if your only goal is to reduce the moral hazard problem?

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Microeconomics: How to reduce the moral hazard problem
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