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Ambiguity preferences for health

Author

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  • Arthur E. Attema

    (Erasmus School of Economics - Erasmus University Rotterdam)

  • Han Bleichrodt

    (Erasmus School of Economics - Erasmus University Rotterdam)

  • Olivier L’haridon

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

In most medical decisions probabilities are ambiguous and not objectively known.Empirical evidence suggests that people's preferences are affected by ambiguity. Health economic analyses generally ignore ambiguity preferences and assume that they are the same as preferences under risk. We show how health preferences can be measured under ambiguity and we compare them with health preferences under risk. We assume a general ambiguity model that includes many of the ambiguity models that have been proposed in the literature. For health gains, ambiguity preferences and risk preferences were indeed the same. For health losses they differed with subjects being more pessimistic in decision under ambiguity. Utility and loss aversion were the same for risk and ambiguity.

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  • Arthur E. Attema & Han Bleichrodt & Olivier L’haridon, 2018. "Ambiguity preferences for health," Post-Print halshs-01807820, HAL.
    • Handle: RePEc:hal:journl:halshs-01807820
    DOI: 10.1002/hec.3795
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01807820
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    3. Kpegli, Yao Thibaut & Corgnet, Brice & Zylbersztejn, Adam, 2023. "All at once! A comprehensive and tractable semi-parametric method to elicit prospect theory components," Journal of Mathematical Economics, Elsevier, vol. 104(C).
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    5. Arthur E. Attema & Werner B. F. Brouwer & Jose Luis Pinto‐Prades, 2022. "Reference‐dependent age weighting of quality‐adjusted life years," Health Economics, John Wiley & Sons, Ltd., vol. 31(12), pages 2515-2536, December.
    6. Stefan A. Lipman & Werner B.F. Brouwer & Arthur E. Attema, 2019. "QALYs without bias? Nonparametric correction of time trade‐off and standard gamble weights based on prospect theory," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 843-854, July.
    7. Stefan A. Lipman & Werner B. F. Brouwer & Arthur E. Attema, 2019. "A QALY loss is a QALY loss is a QALY loss: a note on independence of loss aversion from health states," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(3), pages 419-426, April.
    8. Buckell, John & White, Justin S. & Shang, Ce, 2020. "Can incentive-compatibility reduce hypothetical bias in smokers’ experimental choice behavior? A randomized discrete choice experiment," Journal of choice modelling, Elsevier, vol. 37(C).
    9. Fujii, Yoichiro & Osaki, Yusuke, 2019. "The willingness to pay for health improvement under comorbidity ambiguity," Journal of Health Economics, Elsevier, vol. 66(C), pages 91-100.
    10. Lipman, Stefan A. & Brouwer, Werner B.F. & Attema, Arthur E., 2020. "Living up to expectations: Experimental tests of subjective life expectancy as reference point in time trade-off and standard gamble," Journal of Health Economics, Elsevier, vol. 71(C).
    11. Driouchi, Tarik & Trigeorgis, Lenos & So, Raymond H.Y., 2020. "Individual antecedents of real options appraisal: The role of national culture and ambiguity," European Journal of Operational Research, Elsevier, vol. 286(3), pages 1018-1032.
    12. Surajeet Chakravarty & Todd R. Kaplan & Navonil Mustafee, 2020. "Altering Wait Time Information to Reduce A&E Overcrowding," Discussion Papers 2003, University of Exeter, Department of Economics.
    13. Nikzad, Afshin, 2021. "Persuading a pessimist: Simplicity and robustness," Games and Economic Behavior, Elsevier, vol. 129(C), pages 144-157.

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