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We analyze a rational-expectations model of information acquisition and price formation in an intermediate- good market: prices and net supply are non-negative, there are no noise traders, and the intermediate good has multiple potential uses. Several of our results differ from the classic Grossman-Stiglitz approach. For example, the price mechanism is more informative at high and low prices and potentially uninformative at middle prices. Also, an informed trade by a producer of one final good amounts to a noise trade from the perspective of a producer of another final good, so (a) as the price mechanism becomes more informative for producers of one final good, it becomes less informative for producers of others, who therefore have a stronger incentive to acquire information, so information acquisition has the strategic-complements property between groups, and (b) having more producers (in multiple groups) become informed need not increase the informativeness of the price mechanism.

Zonder onderwerpscode: economie

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Physicians prescribing drugs for patients with schizophrenia and related conditions are remarkably concentrated in their choice among antipsychotic drugs. In 2007 the single antipsychotic drug prescribed by a physician accounted for 66% of all antipsychotic prescriptions written by that physician. Which particular branded antipsychotic was the prescriber's "favorite" varied widely across physicians, i.e. physician prescribing concentration patterns are diverse. Building on Frank and Zeckhauser's [2007] characterization of physician treatments varying from "custom made" to "ready-to-wear", we construct a model of physician learning that generates a number of hypotheses. Using 2007 annual antipsychotic prescribing behavior on 17,652 physicians from IMS Health, we evaluate these predictions empirically. While physician prescribing behavior is generally quite concentrated, prescribers having greater volumes, those with training in psychiatry, male prescribers, and those not approaching retirement age tend to have less concentrated prescribing patterns.

Zonder onderwerpscode: economie

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We analyze a rational-expectations model of information acquisition and price formation in an intermediate- good market: prices and net supply are non-negative, there are no noise traders, and the intermediate good has multiple potential uses. Several of our results differ from the classic Grossman-Stiglitz approach. For example, the price mechanism is more informative at high and low prices and potentially uninformative at middle prices. Also, an informed trade by a producer of one final good amounts to a noise trade from the perspective of a producer of another final good, so (a) as the price mechanism becomes more informative for producers of one final good, it becomes less informative for producers of others, who therefore have a stronger incentive to acquire information, so information acquisition has the strategic-complements property between groups, and (b) having more producers (in multiple groups) become informed need not increase the informativeness of the price mechanism.

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)