How is the Trade off between Adverse Selection and Discrimination Risk Affected by Genetic Testing?: Theory and Experiment

Serie

  • CESifo Working Paper Series

Resumen

  • We compare two genetic testing regulations, Disclosure Duty (DD) and Consent Law (CL), in an environment where individuals choose to take a genetic test or not. DD forces agents to reveal the test results to their insurers, resulting in a discrimination risk. CL allows agents to withhold that information, generating adverse selection. We complement our model with an experiment. We obtain that a larger fraction of agent’s test under CL than under DD, and that the proportion of individuals preferring CL to DD is non-monotone in the test cost when adverse selection is set endogenously at its steady state level.

fecha de publicación

  • 2017

Líneas de investigación

  • Consent Law
  • Disclosure Duty
  • Personalized Medicine
  • Pooling Health Insurance Contracts
  • Test Take Up Rate

Issue

  • 6402