Working Papers

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Embryonic Option-hood (with Mackenzi Barrett and W. Kip Viscusi)

“Strategic Submissions: A Cross-Country Analysis of Supplemental Drug Approvals,” with Pierre Dubois and Tuba Tuncel (draft available by request). We investigate the impact of regulatory changes concerning marketing authorizations on pharmaceutical firms’ behavior. Using a unique data set that lists the research and development projects of pharmaceutical firms, we exploit these regulatory changes to understand whether and how firms react to government policies. Preliminary results, consistent with strategic firm behavior, show that firms prioritize uses of their drugs to submit for formal approval in response to the policy changes toward off-label promotion and prescription. This has consequences on research and development of the pharmaceutical sector and thus on innovation.

“Behavioral   Impediments to Beneficial Experimentation,” with W. Kip Viscusi.  Prior evidence suggests that people do not   experiment enough, and that when they do experiment, they do so poorly. Without sufficient instruction about when   experimentation would be beneficial, consumers may be too reluctant to   experiment with uncertain treatments. This project explores consumers’   sensitivity to estimate precision and data quality in their willingness to   experiment by allowing participants to choose between a traditional drug and   a “new" drug, whose efficacy is less certain. The survey explicitly   discloses several key data: the success rate and sample size associated with   the traditional drug and any existing evidence for the new drug, as well as   the quality and sample size of additional data about the new drug. It also   provides visual representations of the mechanics and weaknesses of different   sampling techniques (random vs. voluntary samples). Using an   incentive-compatible experimental design, we measure participants’   willingness to pay for additional information about new treatments and   ability to update their prior beliefs based on this additional information.   Results demonstrate that participants' willingness to pay for additional   information is sensitive to quality of data offered, the existing data   available, and the potential selection observed in the data. Once purchased, participants incorporate   data by discounting heavily selected samples in their updated beliefs.