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α: calibrated so average coauthorship-adjusted count equals average raw count
We investigate the effects of nonlinear deductible contracts on health utilization behavior by using a laboratory experiment in which we can control the likelihood of hitting the deductible. We also evaluate the effect of subjects receiving regular information updates on their remaining deductible. Our results show that varying the future price has a significant effect on health care consumption. At an individual level, we identify and richly characterize heterogeneity. We find fully forward-looking, fully myopic, as well as mixed types after controlling for risk preferences. We show that there is a substantial welfare loss due to a lack in forward-looking behavior. The distribution of the welfare loss are characterized and differ sharply according to the model of risk preferences adopted for normative evaluation. Potential drivers of welfare effects are investigated and have a tendency to differ across risk preference models.