The impact of ambiguity on health prevention and insurance
AbstractIn this paper, we analyze the choice of primary prevention made by individuals who bear a risk of being in bad health and an additive risk (of complications) that occurs after a disease has been diagnosed. By considering a two argument utility (depending on wealth and health), we show that the presence of a well-known (no ambiguity) additive risk of complications induces more investment in primary prevention by a risk-averse agent only if her preferences does not display some cross prudence in wealth (u122
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Bibliographic InfoPaper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2010-08.
Date of creation: 2010
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health; utility; ambiguity; prevention; insurance.;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- I19 - Health, Education, and Welfare - - Health - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-HEA-2010-04-11 (Health Economics)
- NEP-IAS-2010-04-11 (Insurance Economics)
- NEP-UPT-2010-04-11 (Utility Models & Prospect Theory)
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