Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63132
Authors: 
Hoel, Michael
Iversen, Tor
Nilssen, Tore
Vislie, Jon
Year of Publication: 
2003
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2003,20
Abstract: 
A central theme in the international debate on genetic testing concerns the extent to which insurance companies should be allowed to use genetic information in their design of insurance contracts. We analyze this issue within a model with the following important feature: A person’s well-being depends on the perceived probability of becoming ill in the future in a way that varies among individuals. We show that both tested high-risks and untested individuals are equally well off whether or not test results can be used by insurers. Individuals who test for being low-risks, on the other hand, are made worse off by not being able to verify this to insurers. This implies that verifiability dominates nonverifiability in an ex-ante sense.
Subjects: 
Genetic testing
asymmetric information
insurance
JEL: 
D82
I11
I18
Document Type: 
Working Paper

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