Economics Insights @ CBS

Previous research investigating the impact of pharmaceutical innovation in Turkey has shown that the use of newer drugs increased mean age at death by approximately 3 years during the period 1999-2008 and reduced the number of hospital days by approximately 1% per year during the period 2007-2010.

Mortgage decisions have important consequences for consumers, lenders, and the state of the economy more generally. Mortgage decisions are also prototypical of consumer financial choices that involve a stream of expenditures and consumption occurring across time. The authors use heterogeneity in time preferences for both immediate (present bias) and long-term outcomes to explain a sequence of mortgage decisions, including mortgage choice and the decision to abandon a mortgage.

Uncertainty is an unavoidable part of human life. How do states of uncertainty influence the way people make decisions? We advance the proposition that states of uncertainty increase the reliance on affective inputs in judgments and decisions. In accord with this proposition, results from six studies show that the priming of uncertainty (vs. certainty) consistently increases the effects of a variety of affective inputs on consumers' judgments and decisions.

To align employees' interests with the firm's goals, employers often use performance-based pay, but designing such a compensation plan is challenging because performance is typically multifaceted. For example, a sales employee should be incentivized to sell the company's product, but a focus on current sales without rewarding the salespeople according to the quality of the product and/or customer service may result in fewer future sales.

A crucial element of navigating group conflict is how group members manage stigma imposed on them by other groups. Across three experiments, we propose that group identification is a cause and consequence of self-labeling with stigmatizing group labels, a practice known to reduce stigma. Experiment 1 found that group identification increased self-labeling with a stigmatizing group label.