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Value and demand for genetic information and ambiguity aversion revisited

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  • Stefan Felder
  • Dilek Sevim

Abstract

We use the smooth ambiguity model to show that ambiguity aversion increases the value of and demand for genetic information for low prior beliefs of carrying a genetic mutation. We also examine an extension based on the ex ante uncertainty of the test results. The extended model, which accommodates ambiguity aversion only in the presence of new information, lowers the value of genetic information and leads to information avoidance. If this behavior is sufficiently strong, it could explain the low demand observed for genetic tests.

Suggested Citation

  • Stefan Felder & Dilek Sevim, 2024. "Value and demand for genetic information and ambiguity aversion revisited," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 27(2), pages 161-181, June.
    • Handle: RePEc:bla:rmgtin:v:27:y:2024:i:2:p:161-181
    DOI: 10.1111/rmir.12277
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