Breakdown of Will and the Value of Information
AbstractIt is commonly observed that people refuse to obtain more detailed infor- mation about their health status, e. g. by not taking genetic tests, even if this information is costless and only disclosed to the individual. This observation is in contrast to the predictions of expected utility theory. We present a model that accounts for this phenomenon by using time- inconsistent preferences. It is shown that if people devise strategies against their inconsistency, which in line with the literature will be called will, then information about a serious illness might lead to a breakdown of will. In those cases information might have a negative value. We derive some comparative statistics results and provide empirical evidence.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3111.
Date of creation: Dec 2001
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Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- I10 - Health, Education, and Welfare - - Health - - - General
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- Hoel, Michael & Iversen, Tor & Nilssen, Tore & Vislie, Jon, 2006. "Genetic testing in competitive insurance markets with repulsion from chance: A welfare analysis," Journal of Health Economics, Elsevier, vol. 25(5), pages 847-860, September.
- Hoel, Michael & Iversen, Tor & Nilssen, Tore & Vislie, Jon, 2003.
"Genetic testing and repulsion from chance,"
20/2003, Oslo University, Department of Economics.
- Michael Hoel & Tor Iversen & Tore Nilssen & Jon Vislie, 2004. "Genetic Testing and Repulsion from Chance," CESifo Working Paper Series 1181, CESifo Group Munich.
- Hoel, Michael & Nilssen, Tore & Vislie, Jon & Iversen, Tor, 2009. "Genetic testing and repulsion from chance," HERO On line Working Paper Series 2002:10, Oslo University, Health Economics Research Programme.
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