Title
Existence of Asymmetric Information Structure in Gene Diagnosis -The Mechanism by which Genetic Discrimination is Induced-
Abstract
In this paper, equilibrium of the life/medical insurance market
is analyzed under conditions where insurers demands that an insurant
undergo genetic testing, on the assumption that the Human Genome
Project will allow direct insight into the precise manner of operation
of individual genes. Also, equilibrium in this instance is studied
with attention given to the existence of an asymmetric structure
of information between an insurant and insurers, even if the insurers
are able to propose a contract based on knowledge of the results
of genetic testing. The model described in this paper led to the
conclusion that equilibrium can exist in any instance. In this
paper, I also show that there exists equilibrium totally opposite
to that shown as a result of adverse selection depending on change
in the ratio of individuals undergoing genetic testing, and on
the basis of such equilibrium I discuss the mechanism which causes
"genetic discrimination" which is increasingly being
regarded as a potential problem.
Nobuyuki SOGA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059