VGSF - WU Vienna - LC

Lu Li, LMU München

Campus WU D4.0.019 12:00 - 13:00

Organizer WU Vienna

The Fin­ance Brown Bag Sem­inar is held by the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance (WU Vi­enna) and the Vi­enna Gradu­ate School of Fin­ance (VGSF). It serves as a present­a­tion plat­form for PhD stu­dents, fac­ulty mem­bers, and vis­it­ors. An over­view of BBS on the web­site of the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance.


Septem­ber 25th, 2019, 12:00-13:00, D4.0.019

Lu Li, LMU München

Title: "Open­ing up the Black Box: the Im­pact of Tech­no­lo­gical Trans­par­ency on Self-­Pro­tec­tion"


This article dis­cusses the be­ha­vi­oral and wel­fare im­plic­a­tions of un­cov­er­ing the mech­an­ism of self-­pro­tec­tion tech­no­lo­gies. Based on a new in­ter­pret­a­tion of self-­pro­tec­tion, we in­tro­duce the con­cept of tech­no­lo­gical trans­par­ency -- the ex­tent to which the mech­an­ism of the tech­no­logy is un­der­stood. We ana­lyze the con­sequence of im­proved tech­no­lo­gical trans­par­ency ac­cord­ing to whether the im­prove­ment stems from un­cov­er­ing exo­gen­ous or en­do­gen­ous risk de­termin­ants. We show that tech­no­lo­gical trans­par­ency im­proves wel­fare through en­abling more ef­fi­cient pre­ven­tion, but this wel­fare im­prove­ment may be un­der­mined or even re­versed if in­form­a­tion is in­com­pletely dis­closed or if the risk can be in­sured through private in­sur­ance mar­kets. We also show that tech­no­lo­gical trans­par­ency af­fects be­ha­vior through an ex ante in­form­a­tion chan­nel and an ex post re­gret chan­nel. Our find­ings have im­plic­a­tions on the cost-be­ne­fit ana­lysis of scien­ti­fic re­search con­duc­ted to identify hid­den risk de­termin­ants. They also in­form the design of per­son­al­ized pre­vent­ive health­care, as well as in­form­a­tion cam­paigns to pro­mote pub­lic safety.

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