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Regret-sensitive treatment decisions.

Yoichiro Fujii1, Yusuke Osaki2

  • 1Faculty of Economics, Osaka Sangyo University, Nakagaito 3-1-1, Daito-shi, Osaka, 574-8530, Japan. fujii@eco.osaka-sandai.ac.jp.

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This study uses regret theory to enhance medical decision-making thresholds. Regret and rejoicing lower the probability threshold for treatment, potentially explaining rising healthcare costs and suggesting solutions.

Keywords:
Medical decision-makingNon-expected utilityPublic medical serviceRegret and rejoicingTreatment threshold

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Area of Science:

  • Decision Sciences
  • Medical Economics
  • Behavioral Economics

Background:

  • The threshold approach guides medical decisions based on sickness probability.
  • Expected Utility Theory (EUT) has limitations in describing real-world choices.
  • Regret theory offers an alternative, incorporating disutility from regret and utility from rejoicing.

Purpose of the Study:

  • To generalize the threshold approach to medical decision-making using regret theory.
  • To analyze how regret and rejoicing influence treatment threshold probabilities.
  • To benchmark against the Expected Utility (EU) case.

Main Methods:

  • Generalizing the threshold approach with regret theory.
  • Comparing outcomes under regret theory with the EU benchmark.
  • Identifying conditions for monotonic changes in threshold probability.

Main Results:

  • Regret and rejoicing were found to lower the medical treatment threshold probability.
  • This effect is observed under conditions where EU fails to explain choices.
  • The findings suggest that feelings of regret and rejoicing influence treatment decisions.

Conclusions:

  • Regret theory provides a more descriptive model for medical decision-making than EUT.
  • The influence of regret and rejoicing may contribute to rising healthcare expenditures in OECD countries.
  • Addressing regret sensitivity could mitigate inequalities in public healthcare benefits, and a solution is proposed.