The impacts of COVID-19 on China insurance industry-An empirical analysis based on event study.

Introduction: At the end of 2019, the sudden outbreak of COVID-19 pneumonia has developed from a mass health event to a global epidemic disaster. Its impact extends from human health to social, economic, political, international relations and global governance. In the process of fighting against the epidemic in China, almost all economic sectors were affected, and the insurance industry with epidemic sensitive characteristics was particularly affected. Methods: In order to identify the impacts of COVID-19 on China's insurance industry, this paper uses the event study method to calculate the changes in the cumulative abnormal return rate and the cumulative excess return of Chinese listed insurance companies before and after the outbreak of COVID-19. In the empirical analysis, five different typical events are examined, including the first outbreak of COVID-19 in China, the closure of Wuhan, the dredging of Wuhan, and the listing of vaccines in China. Results: The results show that the return rate of listed companies in the insurance industry showed an "inverted N" curve with the "decreasing, rising and then decreasing." The epidemic mainly has negative effects on the insurance industry in terms of premium income and indemnity expenditure. According to the supply shock theory of the new supply economics, the epidemic has a negative impact on the insurance industry in the short term and a positive impact in the long term. Discussion: In this context, insurance enterprises should attach importance to the change of business model, strengthen the development model of public-private joint venture insurance, promote product innovation and the application of insurance technology, and the experience and practice of the insurance industry in responding to the impact of the epidemic are of great significance to the transformation of China's insurance industry.

Cooperative green innovation.

Cooperative green innovation is an important tool to cope with global climate change and this article highlights cooperative green innovation with game theory. Some interesting conclusions are achieved. First, emission tax stimulates the innovation for all firms. Second, free-rider phenomena appear in cooperative green innovation. When the cooperative green innovation requires big investment, firms have intention to launch free-rider. Finally, the underinvestment of cooperative green innovation exists. This article suggests to regulate innovative investment and to subsidize to improve cooperative green innovation.

Optimal tax selection under monopoly: emission tax vs carbon tax.

Both carbon and emission taxes popularly exist all over the world. Therefore, it is important to compare carbon with emission tax. Under monopolization, this article establishes game theory model to compare carbon with emission tax. On one hand, both carbon and emission taxes reduce energy inputs, outputs, profits, and emission. On the other hand, under optimal taxes, two types of taxes affect identically. Under incomplete information carbon taxes seem more efficient than emission taxes. Based on these conclusions, we suggest to launch environmental tax based on emission function. Or the selection of taxes should consider the emission properties in production.

Renewable energy hybrid subsidy combining input and output subsidies.

With respect to sustainable development, how to promote renewable energy is a major issue. Here, we introduce a hybrid subsidy mechanism that considers both input and output subsidies. Hybrid subsidies are analyzed with stochastic optimization approaches. An outstanding advantage of hybrid subsidies is the flexibility to adjust the intensity between the input and output subsidies. Our study shows that input-biased subsidies advance outputs and improve environmental efficiency (EE), while output-biased subsidies reduce risk and boost producer subsidy equivalents (PSEs). Therefore, the policy implication of this research is that different subsidy intensities should be employed according to preferences or social requirements.

The optimal strategies for clean technology to advance green transition.

By establishing a two-stage model, this paper captures the optimal strategies for clean technology to advance green transition upon various scenarios. Based on theoretical analysis, we conclude that carbon taxes could stimulate innovation and green transition as well as subsidies when technology is mature. On the other hand, the effectiveness of carbon taxes decreases with immature technology. Meanwhile, both energy price fluctuation and innovation risk deter the development of clean technology, while the negative effects are much more significant at the second stage than those at the first stage. In addition, subsidies in both periods show much more significant impacts on the second stage than those on the first stage, while firms face more uncertainty and risk in the first stage. To advance green transition efficiently, the optimal incentive strategy is to allocate more subsidies in the first stage instead of in the second stage.

Players acting as leaders in turn improve cooperation.

Cooperation behaviour is an important topic in society as well as in the biological field, and many factors yield cooperation. Many social phenomena constitute Stackelberg games, but there is little literature on the relationship between Stackelberg games and cooperation. This article shows that in the repeated dynamic Stackelberg games, players acting as leaders in turn yields cooperation. Moreover, social welfare is improved correspondingly when players act as leaders in turn. Therefore, for dynamic Stackelberg games, this paper proposes that the institution of players acting as leaders in turn promotes cooperation.

Effects of asymmetric medical insurance subsidy on hospitals competition under non-price regulation.

BACKGROUND: Poor medical care and high fees are two major problems in the world health care system. As a result, health care insurance system reform is a major issue in developing countries, such as China. Governments should take the effect of health care insurance system reform on the competition of hospitals into account when they practice a reform. This article aims to capture the influences of asymmetric medical insurance subsidy and the importance of medical quality to patients on hospitals competition under non-price regulation. METHODS: We establish a three-stage duopoly model with quantity and quality competition. In the model, qualitative difference and asymmetric medical insurance subsidy among hospitals are considered. The government decides subsidy (or reimbursement) ratios in the first stage. Hospitals choose the quality in the second stage and then support the quantity in the third stage. We obtain our conclusions by mathematical model analyses and all the results are achieved by backward induction. RESULTS: The importance of medical quality to patients has stronger influence on the small hospital, while subsidy has greater effect on the large hospital. Meanwhile, the importance of medical quality to patients strengthens competition, but subsidy effect weakens it. Besides, subsidy ratios difference affects the relationship between subsidy and hospital competition. Furthermore, we capture the optimal reimbursement ratio based on social welfare maximization. More importantly, this paper finds that the higher management efficiency of the medical insurance investment funds is, the higher the best subsidy ratio is. CONCLUSIONS: This paper states that subsidy is a two-edged sword. On one hand, subsidy stimulates medical demand. On the other hand, subsidy raises price and inhibits hospital competition. Therefore, government must set an appropriate subsidy ratio difference between large and small hospitals to maximize the total social welfare. For a developing country with limited medical resources and great difference in hospitals such as China, adjusting the reimbursement ratios between different level hospitals and increasing medical quality are two reasonable methods for the sustainable development of its health system.

Market power in auction and efficiency in emission permits allocation.

This paper analyzes how to achieve the cost-effectiveness by initial allocation of CO2 emission permits when a single dominant firm in production market has market power in auction, and compare two prevalent allocation patterns, mixed allocation and single auction. We show how the firm with market power may manipulate the auction price, thereby this leads to fail to achieve cost-effective solution by auction unless the total permits for allocation equal to the effective emissions cap. Provided that the market power firm receives strictly positive free permits, the effective emissions cap of mixed allocation is larger than that of single auction. The production market share of dominant firm is increasing with the free permits it holds. Finally, we examine the compliance costs and welfare of mixed allocation and single auction, the result show that the former is preferred to the later when policy makers consider economic welfare without welfare cost due to CO2 emissions.

The analysis of bi-level evolutionary graphs.

Evolutionary graphs (EGs), in which evolutionary dynamic is arranged on a graph, were initially proposed by Lieberman et al. [Lieberman, E., Hauert, C., Nowak, M.A., 2005. Evolutionary dynamics on graphs. Nature 433, 312-316] in the biological field and many biological phenomena are successfully explained. EGs on two levels (or bi-level EGs), based on some biological phenomena, are considered in this paper. The bi-level EGs are compared with the one-rooted EGs in two cases. One has the identical numbers of the followers, the other with the same numbers of total individuals. Then, some properties of the bi-level EGs are obtained. It is showed that bi-level EGs are more stable, and the bi-level EGs with just two leaders are the most stable, if they have identical followers respectively. The bi-level EGs theory can successfully explain the phenomena of symbiosis in biology.