How Is the Trade-off between Adverse Selection and Discrimination Risk Affected by Genetic Testing?

Bardey, David, De Donder, Philippe and Mantilla, Cesar (2017) How Is the Trade-off between Adverse Selection and Discrimination Risk Affected by Genetic Testing?: Theory and Experiment. TSE Working Paper, n. 17-777, Toulouse

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Official URL: http://tse-fr.eu/pub/31557

Abstract

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 agents 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.

Item Type: Monograph (Working Paper)
Sub-title: Theory and Experiment
Language: English
Date: March 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Consent Law, Disclosure Duty, Personalised Medicine, Test take up rate, pooling health insurance contracts
JEL codes: C91 - Laboratory, Individual Behavior
D82 - Asymmetric and Private Information
I18 - Government Policy; Regulation; Public Health
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Mar 2017 14:48
Last Modified: 07 Mar 2018 13:24
OAI ID: oai:tse-fr.eu:31557
URI: http://publications.ut-capitole.fr/id/eprint/23204

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