Abstract: |
We consider successive generations of non-altruistic individuals carrying a
good or bad gene. Daughters are more likely to carry their mother's gene than
the opposite one. Competitive insurers can perform a genetic test revealing an
agent's gene. They may condition their quotes on the agent's or on her
ancestors' genetic status. In equilibrium generation one is bribed to take the
test with an unconditional quote. The insurer uses this information to
profitably screen a finite number of generations of their offspring. The
offspring of good gene carriers subsidize the tested generation |