Learn or react? An experimental study of preventive health decision making

Despite public health efforts, uptake of preventive health technologies remains low in many settings. In this paper, we develop a formal model of prevention and test it through a laboratory experiment. In the model, rational agents decide whether to take up health technologies that reduce, but do no...

Full description

Saved in:
Bibliographic Details
Published in:Experimental economics : a journal of the Economic Science Association 2021-03, Vol.24 (1), p.206-237
Main Authors: Fink, Günther, McConnell, Margaret, Nguyen, Bich Diep
Format: Article
Language:English
Subjects:
Behavioral/Experimental Economics
Decision making
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Game Theory
Health risks
Health status
Laboratories
Microeconomics
Negative experiences
Operations Research/Decision Theory
Original Paper
Prevention
Preventive medicine
Public health
Risk
Risk reduction
Social and Behav. Sciences
Uptake
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Despite public health efforts, uptake of preventive health technologies remains low in many settings. In this paper, we develop a formal model of prevention and test it through a laboratory experiment. In the model, rational agents decide whether to take up health technologies that reduce, but do not eliminate the risk of adverse health events. As long as agents are sufficiently risk averse and priors are diffuse, we show that initial uptake of effective technologies will be limited. Over time, the model predicts that take-up will decline as users with negative experiences revise their effectiveness priors towards zero. In our laboratory experiments, we find initial uptake rates between 65 and 80% for effective technologies with substantial declines over time, consistent with the model’s predictions. We also find evidence of decision-making not consistent with our model: subjects respond most strongly to the most recent health outcomes, and react to negative health outcomes by increasing their willingness to invest in prevention, even when health risks without prevention are known by all subjects. Our findings suggest that high uptake of preventive technologies should only be expected if the risk of adverse health outcomes without prevention is high, or if preventive technologies are so effective that the risk of adverse outcomes is negligible with prevention.
ISSN:1386-4157
1573-6938
DOI:10.1007/s10683-020-09668-6