Freedom and need: The evolution of public strategy for biomedical and health research in England

The optimal support of health-related research and development with public money is a complex challenge. Over the last century, policy makers in England have conceived and implemented a variety of models, ranging from independent, curiosity driven research to needs-based state commissions, and promoting different bodies to oversee scientific work. This paper traces these approaches, identifies the principles that drove them, and discusses their role in shaping policy for publicly funded health research, up to the recent launch of a new research strategy by the Department of Health

Overconfidence in Labor Markets

This chapter reviews how worker overconfidence affects labor markets. Evidence from psychology and economics shows that in many situations, most people tend to overestimate their absolute skills, overplace themselves relative to others, and overestimate the precision of their knowledge. The chapter starts by reviewing evidence for overconfidence and for how overconfidence affects economic choices. Next, it reviews economic explanations for overconfidence. After that, it discusses research on the impact of worker overconfidence on labor markets where wages are determined by bargaining between workers and firms. Here, three key questions are addressed. First, how does worker overconfidence affect effort provision for a fixed compensation scheme? Second, how should firms design compensation schemes when workers are overconfident? In particular, will a compensation scheme offered to an overconfident worker have higher-or lower-powered incentives than that offered to a worker with accurate self-perception? Third, can worker overconfidence lead to a Pareto improvement? The chapter continues by reviewing research on the impact of worker overconfidence on labor markets where workers can move between firms and where neither firms nor workers have discretion over wage setting. The chapter concludes with a summary of its main findings and a discussion of avenues for future research