Essays in Information Economics

This dissertation is composed of three essays considering the role of private information in economic environments. The first essay considers efficient investments into technologies such as auditing and enforcement systems that are designed to mitigate information and enforcement frictions that impede the provision of first best insurance against income risk. In the model, the principal can choose a level of enforceability that inhibits an agent\u27s ability to renege on the contract and a level of auditing that inhibits his ability to conceal income. The dynamics of the optimal contract imply an endogenous lower bound on the lifetime utility of an agent, strictly positive auditing at all points in the contract and positive enforcement only when the agent\u27s utility is sufficiently low. Furthermore, the two technologies operate as complements and substitutes at alternative points in the state space. The second essay considers a planning problem with hidden actions and hidden states where the component of utility affected by the unobservable state is separable from component governed by the hidden action. I show how this problem can be written recursively with a one dimensional state variable representing a modified version of the continuation utility promise. I apply the framework to a model in which an agent takes an unobservable decision to invest in human capital using resources allocated to him by the planner. Unlike similar environments without physical investment, it is shown numerically the immiserising does not necessarily hold. In the third essay, with Kyungmin Kim, I examine the effects of commitment on information transmission. We study and compare the behavioral consequences of honesty and white lie in communication. An honest agent is committed to telling the truth, while a white liar may manipulate information but only for the sake of the principal. We identify the effects of honesty and white lie on communication and show that the principal is often better off with a possibly honest agent than with a potential white liar. This result provides a fundamental rationale on why honesty is thought to be an important virtue in many contexts

Tournament a study of the opinions of Ivy League men's basketball student-athletes and coaches on a potential post-season conference

The Ivy League is the only NCAA Division I conference that does not sponsor a basketball post season championship. Missed class time and increased expenses were cited as the main reasons why a tournament has not been held in the past. Student-athletes and coaches of all eight Ivy men's basketball teams completed surveys asking questions on whether they favored adding a conference tournament. Overall, 76% were in favor of a postseason tournament, and most believed the addition of a tournament would provide an opportunity for additional games (84%) and increased television exposure (82%), while not jeopardizing academic success (67%). Coaches and student-athletes selected having each tournament game played on individual campus sites as their most preferable tournament location (53%). A traditional eight-team bracket with no byes was their most favorable tournament format option (59%)

Foot care education and self management behaviors in diverse veterans with diabetes

The objective of this study was to examine differences in self-reported diabetes foot care education, self management behaviors, and barriers to good foot care among veterans with diabetes by race and ethnicity. Data was collected using the Veterans Health Administration Footcare Survey, a validated tool that assessed demographic, general health, diabetes and foot self-care information, barriers to foot self-care, receipt of professional foot care, and satisfaction with current care. We mailed surveys to a random sample of patients with diabetes from eight VA medical centers. Study participants were 81% White; 13% African American; 4% Asian, and 2% American Indian and Pacific Islanders. The majority of respondents felt that they did not know enough about foot self-care. There were large gaps between self-reported knowledge and actual foot care practices, even among those who reported “knowing enough” on a given topic. There were significant differences in self-reported foot care behaviors and education by race and ethnicity. These findings document the need for culturally-specific self-management education to address unique cultural preferences and barriers to care

Costs and Consequences Associated With Newer Medications for Glycemic Control in Type 2 Diabetes

OBJECTIVENewer medications offer more options for glycemic control in type 2 diabetes. However, they come at considerable costs. We undertook a health economic analysis to better understand the value of adding two newer medications (exenatide and sitagliptin) as second-line therapy to glycemic control strategies for patients with new-onset diabetes.RESEARCH DESIGN AND METHODSWe performed a cost-effectiveness analysis for the U.S. population aged 25–64. A lifetime analytic horizon and health care system perspective were used. Costs and quality-adjusted life years (QALYs) were discounted at 3% annually, and costs are presented in 2008 U.S. dollars. We compared three glycemic control strategies: 1) glyburide as a second-line agent, 2) exenatide as a second-line agent, and 3) sitagliptin as a second-line agent. Outcome measures included QALYs gained, incremental costs, and the incremental cost-effectiveness ratio associated with each strategy.RESULTSExenatide and sitagliptin conferred 0.09 and 0.12 additional QALYs, respectively, relative to glyburide as second-line therapy. In base case analysis, exenatide was dominated (cost more and provided fewer QALYs than the next most expensive option), and sitagliptin was associated with an incremental cost-effectiveness ratio of $169,572 per QALY saved. Results were sensitive to assumptions regarding medication costs, side effect duration, and side effect–associated disutilities.CONCLUSIONSExenatide and sitagliptin may confer substantial costs to health care systems. Demonstrated gains in quality and/or quantity of life are necessary for these agents to provide economic value to patients and health care systems

Improving Outpatient Diabetes Care

More than 20% of patients in the Veterans Health Administration (VHA) have diabetes; therefore, disseminating “best practices” in outpatient diabetes care is paramount. The authors’ goal was to identify such practices and the factors associated with their development. First, a national VHA diabetes registry with 2008 data identified clinical performance based on the percentage of patients with an A1c \u3e9%. Facilities (n = 140) and community-based outpatient clinics (n = 582) were included and stratified into high, mid, and low performers. Semistructured telephone interviews (31) and site visits (5) were conducted. Low performers cited lack of teamwork between physicians and nurses and inadequate time to prepare. Better performing sites reported supportive clinical teams sharing work, time for non-face-to-face care, and innovative practices to address local needs. A knowledge management model informed our process. Notable differences between performance levels exist. “Best practices” will be disseminated across the VHA as the VHA Patient-Centered Medical Home model is implemented