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 policy-holders' welfare under the two regulations. Disclosure Duty forces individuals to reveal their test results to their insurers, exposing thorn 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 Iow 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 exoge- nous 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.

• Autores: Bardey , David; Donder, Philippe de; Mantilla Ribero, César Andrés
• Tipo de recurso: Work document
• Fecha de publicación: 2014
• Institución: Universidad de los Andes
• Repositorio: Séneca: repositorio Uniandes
• Idioma: eng
• OAI Identifier: oai:repositorio.uniandes.edu.co:1992/8529
• Acceso en línea: http://hdl.handle.net/1992/8529
• Palabra clave: Consent law; Disclosure duty; Discrimination risk; Experiment; Informational value of test; Personalized medicine; Genética humana - Aspectos económicos - Investigaciones; Consentimiento (Derecho) - Investigaciones; Divulgación de información; D82, I18, C91
• Rights: openAccess
• License: http://creativecommons.org/licenses/by-nc-nd/4.0/