Arbeitspapier
Adverse Selection vs Discrimination Risk with Genetic Testing. An Experimental Approach
We develop a theoretical analysis of two widely used regulations of genetic tests, disclosure duty and consent law, and we run several experiments in order to shed light on both the take-up rate of genetic testing and on the comparison of policyholders' welfare under the two regulations. Disclosure Duty forces individuals to reveal their test results to their insurers, exposing them to the risk of having to pay a large premium in case they are discovered to have a high probability of developing a disease (a discrimination risk). Differently, Consent Law allows them to hide this detrimental information, creating asymmetric information and adverse selection. We obtain that the take-up rate of the genetic test is low under Disclosure Duty, larger and increasing with adverse selection under Consent Law. Also, the fraction of individuals who are prefer Disclosure Duty to Consent Law increases with the amount of adverse selection under the latter. These results are obtained for exogenous values of adverse selection under Consent Law, and the repeated interactions experiment devised has not resulted in convergence towards an equilibrium level of adverse selection.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 5080
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Health: Government Policy; Regulation; Public Health
Design of Experiments: Laboratory, Individual
- Thema
-
disclosure duty
consent law
discrimination risk
informational value of test
personalized medicine
experiment
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bardey, David
De Donder, Philippe
Mantilla, Cesar
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Bardey, David
- De Donder, Philippe
- Mantilla, Cesar
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014
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