Preventives Versus Treatments Redux: Tighter Bounds on Distortions in Innovation Incentives with an Application to the Global Demand for HIV Pharmaceuticals

Kremer and Snyder (Q J Econ 130:1167–1239, 2015) show that demand curves for a preventive and treatment may have different shapes though they target the same disease, biasing the pharmaceutical manufacturer toward developing the lucrative rather than the socially desirable product. This paper tightens the theoretical bounds on the potential deadweight loss from such biases. Using a calibration of the global demand for HIV pharmaceuticals, we demonstrate the dramatically sharper analysis achievable with the new bounds, allowing us to pinpoint potential deadweight loss at 62% of the global gain from curing HIV. We use the calibration to perform policy counterfactuals, assessing welfare effects of government policies such as a subsidy, reference pricing, and price-discrimination ban. The fit of our calibration is good: we find that a hypothetical drug monopolist would price an HIV drug so high that only 4% of the infected population worldwide would purchase, matching actual drug prices and quantities in the early 2000s before subsidies in low-income countries ramped up.     

Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms.     

Modularization of hybrid censoring schemes and its application to unified progressive hybrid censoring

In this paper, a structural analysis of hybrid censoring models is presented. This new modularization approach to hybrid censoring models enables a convenient derivation of distributional results. For instance, it allows to derive the exact distribution of the MLEs under an exponential assumption for very complex hybrid scenarios. In order to illustrate the benefit of this idea, we apply it to four new unified progressive hybrid censoring schemes. They are extensions of already proposed unified Type-I/II/III/IV hybrid censoring schemes to progressively Type-II censored data. The resulting analysis shows that the modularization approach provides a powerful, efficient, and elegant tool to study even more complex hybrid censoring models.     

An Ethical Inquiry of the Effect of Cockpit Automation on the Responsibilities of Airline Pilots: Dissonance or Meaningful Control?

Journal of Business Ethics - Airline pilots are attributed ultimate responsibility and final authority over their aircraft to ensure the safety and well-being of all its occupants. Yet, with the...     

A study of the relationships among sensory experience,emotion, and buying behavior in coffeehouse chains

Studies that simultaneously explore the effects of sensory experience on consumer emotions and behavior are rare. This paper builds a model of buying behavior based on sensory experience, 570 valid questionnaires were obtained from coffeehouse customers. Using structural equation modeling and multiple regression analysis, this paper validates the concept model and verifies that sensory experience is a significant antecedent to buying behavior. This study indicates that certain sensory experiences significantly influence emotion. Emotion also plays a mediating role in the relationship between sensory experience and behavioral intentions. The findings are theoretically and practically profound as they address the relationships among sensory experience, consumer emotions, behavioral intentions, and buying behavior, as well as explore how the five senses affect emotions and buying behavior. This paper concludes by indicating managerial implications and research limitations.     

Is the Retail Gasoline Market Local or National?

This paper studies the effect of station density on prices in the retail gasoline market in the Czech Republic. We estimate the impact of the number of competing stations in various driving-distance ranges around each station on prices. We find that station density has a negative effect on prices; the effect decreases with distance and is statistically significant up to six kilometers. This suggests that the retail gasoline market is local rather than national.     

Varieties of paternalism and the heterogeneity of utility structures

A principal source of interest in behavioral economics has been its advertised contributions to policies aimed at ‘nudging’ people away from allegedly natural but self-defeating behavior toward patterns of response thought more likely to improve their welfare. This has occasioned controversies among economists and philosophers around the normative limits of paternalism, especially by technical policy advisors. One recent suggestion has been that ‘boosting,’ in which interventions aim to enhance people’s general cognitive skills and representational repertoires instead of manipulating their choice environments behind their backs, avoids the main normative challenges. A limitation in most of this literature is that it has focused on relatively sweeping policy recommendations and consequently on strong polar alternatives of general paternalism and strict laissez faire. We review a real instance, drawn from a consulting project we conducted for an investment bank, of a proposed intervention that is more typical of the kind that economists are more often actually called upon to offer. In this example, the sophistication of current tools for preference attribution, combined with philosophical externalism about the semantics of preferences that makes it less plausible to attribute their literal self-conscious representation to people as propositional attitude content becomes more tightly refined, blocks applicability of the distinction between nudging and boosting. This seems to call for irreducible, context-specific ethical judgment in assessing the appropriateness of the forms of paternalism that economists must actually wrestle with in going about their everyday business.