Journal article
Take-up for genetic tests and ambiguity
Journal of risk and uncertainty, Vol.48(2), pp.111-133
04/01/2014
DOI: 10.1007/s11166-014-9186-z
Abstract
Under the expected utility hypothesis a costless genetic test has, at worst, zero private value. This happens if it does not affect optimal decisions. If the genetic test facilitates better decision-making for at least one possible test outcome, then it has positive private value. This theoretical result seems to contradict the fact that empirically observed take-up rates for genetic tests are surprisingly low. We demonstrate that if individuals display ambiguity aversion, a costless genetic test that does not affect optimal decisions is never taken. Furthermore, there is a trade-off between aversion against uncertainty of test results and utility gains from better decision-making if optimal decisions depend on the level of information. The reason is that, from an ex-ante view, a genetic test introduces uncertainty of probabilities which diminishes the value of information to an ambiguity-averse decision-maker. Ambiguity aversion regarding test results thus provides an explanation for low take-up rates for genetic tests.
Details
- Title: Subtitle
- Take-up for genetic tests and ambiguity
- Creators
- Michael Hoy - University of GuelphRichard Peter - Ludwig-Maximilians-Universität MünchenAndreas Richter - Ludwig-Maximilians-Universität München
- Resource Type
- Journal article
- Publication Details
- Journal of risk and uncertainty, Vol.48(2), pp.111-133
- DOI
- 10.1007/s11166-014-9186-z
- ISSN
- 0895-5646
- eISSN
- 1573-0476
- Publisher
- Springer Nature
- Number of pages
- 23
- Language
- English
- Date published
- 04/01/2014
- Academic Unit
- Finance
- Record Identifier
- 9984380545302771
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