An experimental methodology testing for prudence and third-order preferences

We propose an experimental method to test individuals for prudence (i.e. downside risk aversion) outside the expected utility framework. Our method relies on a novel representation of compound lotteries which allows for a systematic parameterization that captures the full generality of prudence. Therefore, we develop a general technique for lottery calibration in experiments. Since we investigate a very subtle third-order property we test our method in the laboratory employing a factorial design. We find that it yields robust results and that prudence is observed on the aggregate as well as on the individual level. Further we show that preferences based on statistical moments, in particular skewness seeking, can at most approximately explain individuals' behavior in the experiment.Decision making under uncertainty, risk preferences, prudence, downside risk, statistical moments, laboratory experiment

How Payment Systems Affect Physicians' Provision Behaviour – An Experimental Investigation

Understanding how physicians respond to incentives from payment schemes is a central concern in health economics research. We introduce a controlled laboratory experiment to analyse the influence of incentives from fee-for-service and capitation payments on physicians’ supply of medical services. In our experiment, physicians choose quantities of medical services for patients with different states of health. We find that physicians provide significantly more services under fee-for-service than under capitation. Patients are overserved under fee-forservice and underserved under capitation. However, payment incentives are not the only motivation for physicians’ quantity choices, as patients’ health benefits are of considerable importance as well. We find that patients in need of a high (low) level of medical services receive a larger health benefit under fee-for-service (capitation).Physician payment system; laboratory experiment; incentives; fee-for-service; capitation

Changing preferences: an experiment and estimation of market-incentive effects on altruism

This paper studies how altruistic preferences are changed by markets and incentives. We conduct a laboratory experiment in a within-subject design. Subjects are asked to choose health care qualities for hypothetical patients in monopoly, duopoly, and quadropoly. Prices, costs, and patient benefits are experimental incentive parameters. In monopoly, subjects choose quality to tradeoff between profits and altruistic patient benefits. In duopoly and quadropoly, we model subjects playing a simultaneous-move game. Each subject is uncertain about an opponent's altruism, and competes for patients by choosing qualities. Bayes-Nash equilibria describe subjects' quality decisions as functions of altruism. Using a nonparametric method, we estimate the population altruism distributions from Bayes-Nash equilibrium qualities in different markets and incentive configurations. Markets tend to reduce altruism, although duopoly and quadropoly equilibrium qualities are much higher than those in monopoly. Although markets crowd out altruism, the disciplinary powers of market competition are stronger. Counterfactuals confirm markets change preferences.Accepted manuscrip

Four Contributions to Experimental Economics

Over the last thirty years findings from economic experiments substantially contributed to a better understanding of a wide variety of phenomena in different branches of economics. In areas like industrial organization, game theory, public choice or labor economics controlled laboratory experiments became commonplace (Plott and Smith 2008). In contrast, in health economics the use of laboratory experimentation is rather in its infant stages. This is somewhat surprising as prominent proponents, like the US health economist Victor R. Fuchs, have already argued that incorporating methods of experimental economics into health economic research might lead to great benefits for the latter (Fuchs 2000). Similarly, very little experimental research has focussed on individual risk attitudes of higher orders, like prudence and temperance, so far. Various experimental methods have been developed to investigate risk aversion (e.g., Holt and Laury 2002) and to test theories of decision-making under risk (e.g., Camerer 1989, Hey and Orme 1994). It is, thus, surprising that an appropriate method to test for higher-order risks is still lacking. The four experimental studies presented in the dissertation at hand aim to fill this gap in the two respective research areas. The first two chapters present novel experimental methods to explore individual attitudes towards higher-order risks. In the third chapter, a laboratory experiment is introduced in order to study the influence of payment incentives on physician behavior. The final chapter analyzes the link between other-regarding motivations and physician payment incentives for two different subject pools

How Payment Systems Affect Physicians´ Provision Behaviour – An Experimental Investigation

A central concern in health economics is to understand the influence of commonly used physician payment systems. We introduce a controlled laboratory experiment to analyze the influence of fee-for-service (FFS) and capitation (CAP) payments on physicians' behaviour. Medical students decide as experimental physicians on the quantity of medical services. Real patients gain a monetary benefit from their choices. Our main findings are that patients are overserved in FFS and underserved in CAP. Financial incentives are not the only motivation for physicians' quantity decisions, though. The patient benefit is of considerable importance as well. Patients are affected differently by the two payment systems. Those patients in need of a low level of medical services are better off under CAP, whereas patients with a high need of medical services gain more health benefit when physicians are paid by FFS.Physician payment system; laboratory experiment; incentives; fee-for-service; capitation

Behavioral experiments in health economics

The state-of-the-art literature at the interface between experimental and behavioral economics and health economics is reviewed by identifying and discussing ten areas of potential debate about behavioral experiments in health. By doing so, the different streams and areas of applications of the growing field of behavioral experiments in health are reviewed, by discussing which significant questions remain to be discussed, and by highlighting the rationale and the scope for the further development of behavioral experiments in health in the years to come

Joint measurement of risk aversion, prudence and temperance

We propose a method to measure the intensity of risk aversion, prudence (downside risk aversion) and temperance (outer risk aversion) in experiments. Higher-order risk compensations are defined within the proper risk apportionment model of Eeckhoudt and Schlesinger [American Economic Review, 96 (2006) 280] that are elicited using a multiple price list format. This approach is not based on expected utility theory. In our experiment we find evidence for risk aversion, prudence and temperance. Women demand higher risk compensations for all orders. The highest compensation is demanded for taking downside risk, not for being (second order) risk-loving. This highlights the importance of prudence when considering economic decisions under risk.Decision making under risk, laboratory experiment, prudence, risk aversion, temperance, gender differences

Unravelling the high-dimensional structure of spatial neglect and visuospatial attention: A multivariate approach to lesion-behaviour mapping

One of the most studied and elaborated neurological disorders after stroke is probably spatial neglect, a disorder of spatial exploration, attention and awareness occurring in about two third of all right hemispheric stroke patients. A characteristic symptom these patients show is a failure to orient or respond to information on the contralesional side of space including a general orientation to the ipsilesional side. It is still not possible to come to a common consensus regarding this syndrome on theoretical, anatomical and behavioural aspects. The investigation of the anatomical substrates of spatial neglect, however, offers chances to shed light on crucial pathophysiological processes and inform theoretical models. Therefore, a complete research field dedicated several decades of research to the question where in the brain the syndrome of spatial neglect might have its´ pathogenesis and how this information can help us to understand cognitive processes of normal spatial exploration and attentional processing. A method which largely contributed to this field is called lesion-behaviour mapping by drawing statistical inference about the functional brain architecture from focal brain damage. Following the development within the last five to ten years, a new era of computerised lesion-behaviour mapping techniques became widely available, allowing to reiterate and challenge previous findings and to account for the high-dimensional information present in brain lesions. In my thesis I employed these new techniques to unravel the anatomical substrates of the syndrome of spatial neglect and related spatial attentional deficits. I want to show that these methods can be deployed to make valuable contributions to the understanding of the pathophysiology of the syndrome. In my first empirical work, the presence of a large right-hemispheric network related to the behavioural severity of spatial neglect can be confirmed, closing longstanding controversies. It shows that multivariate machine-learning based lesion-behaviour mapping techniques are particularly suited to detect critical brain areas and to evaluate the predictive performance of underlying statistical models. In the second and third empirical work, I complemented these primary findings by applying the same statistical methodology to parameters of remote disconnection and to different diagnostic tools in the assessment of spatial neglect. These works show crucial areas and anatomical hubs severely disconnected to other areas of the brain and contributing to the development of lateralised deficits in spatial neglect patients. Finally, with the last empirical work, contributions to controversial views concerning the anatomical substrates of the extinction phenomenon, a further spatial attentional deficit, were made. By evaluating lesion-behaviour relationships in spatial neglect, as it was done in the present thesis, it will become possible to inform clinical staff how to direct patients to more effective management and treatment schedules, essential for rehabilitation, while spatial neglect generally is considered as a negative prognosis factor for stroke recovery

The formation of physician altruism

We study how patient-regarding altruism is formed by medical education. We elicit and structurally estimate altruistic preferences using experimental data from a large sample of medical students ( = 733) in Germany at different progress stages in their studies. The estimates reveal substantial heterogeneity in altruistic preferences of medical students. Patient-regarding altruism is highest for freshmen, significantly declines for students in the course of medical studies, and tends to increase again for last year students, who assist in clinical practice. Also, patient-regarding altruism is higher for females and positively associated to general altruism. Altruistic medical students have gained prior practical experience in healthcare, have lower income expectations, and are more likely to choose surgery and pediatrics as their preferred specialty

Key stages in mammary gland development: The mammary end bud as a motile organ

In the rodent, epithelial end buds define the tips of elongating mammary ducts. These highly motile structures undergo repeated dichotomous branching as they aggressively advance through fatty stroma and, turning to avoid other ducts, they finally cease growth leaving behind the open, tree-like framework on which secretory alveoli develop during pregnancy. This review identifies the motility of end buds as a unique developmental marker that represents the successful integration of systemic and local mammotrophic influences, and covers relevant advances in ductal growth regulation, extracellular matrix (ECM) remodeling, and cell adhesion in the inner end bud. An unexpected growth-promoting synergy between insulin-like growth factor-1 and progesterone, in which ducts elongate without forming new end buds, is described as well as evidence strongly supporting self-inhibition of ductal elongation by end-bud-secreted transforming growth factor-β acting on stromal targets. The influence of the matrix metalloproteinase ECM-remodeling enzymes, notably matrix metalloproteinase-2, on end bud growth is discussed in the broader context of enzymes that regulate the polysaccharide-rich glycosaminoglycan elements of the ECM. Finally, a critical, motility-enabling role for the cellular architecture of the end bud is identified and the contribution of cadherins, the netrin/neogenin system, and ErbB2 to the structure and motility of end buds is discussed