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Experimental study of consumer responses to different sources of information about prescription drugs

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  • Byl, Jacob P.
  • Viscusi, W. Kip

Abstract

Consumers receive risk information about prescription drugs from many sources, including from largely unregulated attorney advertisements. This experiment measures subjective risk beliefs about prescription drugs and subjects’ drug-taking behavior in an incentivized setting. Results of the experiment are used to estimate a Bayesian learning model to ascertain the risk levels implied by different information sources and the informational weights subjects place on these sources. Even after people have received scientifically based drug risk information from a doctor and product label, attorney litigation advertising boosts risk beliefs about side effects by an average of 16 out of 100 cases, which is roughly a 50% increase over baseline risk beliefs. Risk beliefs have a significant effect on drug-taking behavior in an incentivized environment. Experience with taking the drug also feeds back into the learning process about risk beliefs. Our experimental results help formalize how consumers update risk beliefs and suggest ways to encourage a learning environment that avoids alarmist updating based on information sources like attorney advertising.

Suggested Citation

  • Byl, Jacob P. & Viscusi, W. Kip, 2021. "Experimental study of consumer responses to different sources of information about prescription drugs," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 754-771.
    • Handle: RePEc:eee:jeborg:v:186:y:2021:i:c:p:754-771
    DOI: 10.1016/j.jebo.2020.10.025
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    More about this item

    Keywords

    Risk updating; Experimental; Bayesian learning; Attorney advertising; Litigation advertising; Direct-to-consumer advertising; Prescription drugs;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • K2 - Law and Economics - - Regulation and Business Law
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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