Do Off-Label Drug Practices Argue Against FDA Efficacy Requirements? Testing an Argument by Structured Conversations with Experts

The Food, Drug and Cosmetics Act of 1938 with amendments in 1962 is inconsistent regarding FDA certification of a drug’s efficacy. The act requires efficacy certification for the drug’s initial (“on-label”) uses, but does not require certification before physicians may prescribe for subsequent (“off-label”) uses. Are there good reasons for this inconsistency? Using a sequential online survey we carried on a “virtual conversation” with some 500 physicians. The survey asked whether efficacy requirements should be imposed on off-label uses, and almost all physicians said no. It asked whether the efficacy requirements for initial uses should be dropped, and most said no. We then gently challenged respondents asking them whether opposing efficacy requirements in one case but not the other involved an inconsistency. In response to this challenge we received hundreds of written commentaries. This investigation taps the specialized knowledge of hundreds of physicians and organizes their insights into challenges to the consistency argument. Thus, it employs a method of structured conversations with experts to test the merit of an argument. Is the consistency argument a case of “foolish consistency,” or does it hold up even under scrutiny?Food and Drug Administration; drug approval; efficacy requirements; off-label uses; on-label uses; certification; liberalization

Signaling Quality:How Refund Bonuses Can Overcome Information Asymmetries in Crowdfunding

Crowdfunding can suffer from information asymmetry, leaving some investors disappointed with low-quality projects, whereas other high-quality projects remain unfunded. We show that refund bonuses, which provide investors a payment if a fundraising campaign is unsuccessful, can signal project quality and help overcome the market failure in crowdfunding. Because strong projects have a lower risk of bonus payout, entrepreneurs with strong projects are more likely to offer bonuses. This signals high quality to investors, and due to their updated beliefs, this drives investment toward such projects. An experiment provides supporting empirical evidence for the benefits of this signaling solution to the problems of information asymmetry in crowdfunding

Early Refund Bonuses Increase Successful Crowdfunding

The assurance contract mechanism is often used to crowdfund public goods. This mechanism has weak implementation properties that can lead to miscoordination and failure to produce socially valuable projects. To encourage early contributions, we extend the assurance contract mechanism with refund bonuses rewarded only to early contributors in the event of fundraising failure. The experimental results show that our proposed solution is very effective in inducing early cooperation and increasing fundraising success. Limiting refund bonuses to early contributors works as well as offering refund bonuses to all potential contributors, while also reducing the amount of bonuses paid. We find that refund bonuses can increase the rate of campaign success by 50% or more. Moreover, we find that even taking into account campaign failures, refund bonuses can be financially self-sustainable suggesting the real world value of extending assurance contracts with refund bonuses

Race, poverty, and American tort awards: evidence from three datasets

We investigate the impact of the race and income of the jury pool on trial awards. We find that the average tort award increases as black and Hispanic county population rates increase and especially as black and Hispanic county poverty rates increase. An increase in the black countypoverty rate of 1 percentage point tends to raise the average personal injury tort award by 3 to 10 percent. An increase in the Hispanic county-poverty rate of 1 percentage point tends to raise awards by as much as 7 percent although this effect is less well estimated. These effects imply that forum shopping for high-poverty minority counties could raise awards by hundreds of thousands of dollars. Average awards fall with increases in white (non-black, non-Hispanic) poverty rates in two of our datasets, thus making these findings even more surprising. Awards increase with black and Hispanic county-poverty rates even after controlling for a wide variety of other potential causes