HIAS Health invited Prof. Han Bleichrodt, Professor of Behavioral Economics, Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands, as a guest speaker and held its regular seminar on Wednesday, October 10, 2018. The seminar was co-hosted as the 33rd HIAS Health Regular Seminar/Hitotsubashi University International Seminar.
|Prof. Han Bleichrodt (Erasmus University Rotterdam)
|Prof. Han Bleichrodt responding a question
|Group photo of participants
|Date & time
|October 10 (Wed), 2018 18:00-19:30
|HIAS Seminar Room (Faculty Building II, Room 517), Kunitachi West Campus, Hitotsubashi University
|Prof. Han Bleichrodt, Professor of Behavioral Economics, Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands
|Ambiguity preferences for health
|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. Our results imply that reducing the clinical ambiguity of health losses has more impact than reducing the ambiguity of health gains, that utilities elicited with known probabilities may not carry over to an ambiguous setting, and that ambiguity aversion may impact value of information analyses if losses are involved. These findings are highly relevant for medical decision making, because most medical interventions involve losses.