Value and demand for genetic information and ambiguity aversion revisited

Stefan Felder and Dilek Sevim

Risk Management and Insurance Review, 2024, vol. 27, issue 2, 161-181

Abstract: We use the smooth ambiguity model to show that ambiguity aversion increases the value of and demand for genetic information for low prior beliefs of carrying a genetic mutation. We also examine an extension based on the ex ante uncertainty of the test results. The extended model, which accommodates ambiguity aversion only in the presence of new information, lowers the value of genetic information and leads to information avoidance. If this behavior is sufficiently strong, it could explain the low demand observed for genetic tests.

Date: 2024
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https://doi.org/10.1111/rmir.12277

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Persistent link: https://EconPapers.repec.org/RePEc:bla:rmgtin:v:27:y:2024:i:2:p:161-181

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