Table IV:

Numerical Illustration Comparing the Neo-classical Optimal Copay to the Optimal Copay

	Neo-classical Optimal Copay (pN)	Optimal Copay (pB)
$\tilde{\epsilon }=-99$	99.98	.02
$\tilde{\epsilon }=0$	97.95	97.95
$\tilde{\epsilon }=99$	0	197.82

Notes: U(C) = αC − βC² for α = 7000, β = 1/2; $s~U[0,\overline{s}]$ for $\overline{s}=200$; b(s; γ) = s for all (s, γ); and $\epsilon (s;\theta )=\tilde{\epsilon }$ for all (s; θ). We use the following values for the calculations: y = 2500, q = .1, c = 100, and $\tilde{\epsilon }\in \{-99,0,99\}$. There is a unique candidate for the neo-classical optimal copay in all cases. Note that since c = 100, the copay coincides with the coinsurance rate in percentage units.