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Home > Research > Seminars and Meetings > External Research Seminars

External Seminar

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2021-2022


Upcoming seminars 2021-2022

  • October 11,11.00
    Pierre Dubois (Toulouse School of Economics)
    - "Bargaining and International Reference Pricing in the Pharmaceutical Industry"

Abstract

The United States spends twice as much per person on pharmaceuticals as European countries, in large part because prices are much higher in the US. This fact has led policymakers to consider legislation for price controls. This paper assesses the effects of a US reference pricing policy that would cap prices in US markets by those offered in reference countries as proposed in the H.R.3 Lower Drug Costs Now Act of 2019. We estimate a structural model of demand and supply for pharmaceuticals in the US and reference countries like Canada where prices are set through a negotiation process between pharmaceutical companies and the government. We then simulate the counterfactual international reference pricing equilibrium, allowing firms to internalize the cross-country externalities introduced by this policy. We find that such a policy results in a slight decrease in US prices and a substantial increase in reference countries prices. The magnitude of these effects depends on the number, size and market structure of references countries. Overall, we find modest consumer welfare gains in the US but substantial losses in reference countries suggesting that this policy may not be the best way to introduce price controls in the US.

Past seminars 2021-2022

  • September 14, 11.00
    Friederike Mengel (University of Essex)
    - "Non-Bayesian Statistical Discrimination"

Abstract

Models of statistical discrimination typically assume that employers make rational inference from (education) signals. However, there is a large amount of evidence showing that most people do not update their beliefs rationally. We use a model and two experiments to show that employers who are conservative, in the sense of signal neglect, discriminate more against disadvantaged groups than Bayesian employers. We find that such irrational statistical discrimination deters high-ability workers from disadvantaged groups from pursuing education, further exacerbating initial group inequalities. Excess discrimination caused by employer conservatism is especially important when signals are very informative. Out of the overall hiring gap in our data, around 40% can be attributed to rational statistical discrimination, a further 40% is due to irrational statistical discrimination, and the remaining 20% is unexplained or potentially taste-based.


Past External Seminars (all years)


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