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Actually, if the insuree is rational, it especially makes sense for the insurance company to pay for the annual checkup. If the insurance company only covers me
by obastani 11y ago
Actually, if the insuree is rational, it especially makes sense for the insurance company to pay for the annual checkup. If the insurance company only covers me when I get really sick, I lose money by going for the annual checkup -- I'm "better off" waiting to get really sick, and then having them cover all of my expenses.
- maxerickson 11y agoYou've defined rational as valuing money over health. (the jargon rational economic actor maximizes value, not dollars)
- greggyb 11y agoJust an addition: rationality in economics assumes a logical[0] ordering of preferences and behavior which maximizes value within this ordering. [0] Think transitivity: I prefer A to B and I prefer B to C; I must not prefer C to A. There's more nuance, but this is enough for the intuition. Without this ordering, maximizing value makes no sense.