Law Commons^™

Collective Myopia, Ronen Avraham, Kiwi Camara

ronen avraham

Collective myopia is a widespread but poorly understood problem that causes classes of similarly situated investors to underinvest in prospectively efficient improvements like education, capital, and preventive medical care. We introduce the concept of collective myopia, describe it, offer several solutions to it, and identify and discuss the real-world conditions that affect these solutions’ relative desirability. We apply our analysis to health insurance, prescribing a mandatory-membership clearinghouse, to be created by federal legislation, that would require its insurer members to cover prospectively efficient treatments identified by vote of the insurer members and, when an insured switches from one insurer member …