Economics Insights @ CBS

Philosophers and psychologists have long been interested in identifying factors that influence moral judgment. The current analysis compares the literatures on moral psychology and decision-making under uncertainty to propose that utilitarian choices are driven by the same forces that lead to risky choices.

This paper integrates social norm constructs from different disciplines into an integrated model. Norms exist in the objective social environment in the form of behavioral regularities, patterns of sanctioning, and institutionalized practices and rules. They exist subjectively in perceived descriptive norms, perceived injunctive norms, and personal norms. We also distil and delineate three classic theories of why people adhere to norms: internalization, social identity, and rational choice.

Longitudinal, disease-level data are used to analyze the impact of pharmaceutical innovation on longevity (mean age at death), hospital utilization, and medical expenditure in Greece during the period 1995–2010. The estimates indicate that pharmaceutical innovation increased mean age at death by 0.87 years (10.4 months) – about 44% of the total increase in longevity – and that diseases with larger increases in the cumulative number of drugs launched one to four years earlier had smaller increases in the number of hospital days.

We test the empirical validity of a claim that has been playing a central role in debates on corporate governance — the claim that interventions by activist hedge funds have a detrimental effect on the long-term interests of companies and their shareholders. We subject this claim to a comprehensive empirical investigation, examining a long five-year window following activist interventions, and we find that the claim is not supported by the data.