This podcast touches on the lack of innovation in pharma and criticism about outsourcing innovation. Do these criticisms ignore recent technological advances in biotech (and the convergence of AI and genomics) that have reduced the minimum efficient scale in drug discovery creating new opportunities for startups, small firms, and scientist entrepreneurs? When we think of therapeutics as dispensing knowledge packed into a capsule or syringe, knowledge that has properties of both a private and public good (i.e. non-rival and partially excludable) scientist entrepreneurs are better incentivized and able to capture greater value from their discoveries in a venture capital funded startup environment than a larger institution like pharmaceutical companies or universities (even with Bayh-Dole Act). Drug discovery is risky, but by combining option value and discovery of new information with staged investment VC firms can discover positive NPV projects that would otherwise be rejected under conventional financing models. The combination of technological change, the economics of knowledge, and venture capital seems to reduce the comparative advantage of innovating 'in-house.' Maybe it is the case that large pharmaceutical firms have more of a comparative advantage navigating the valley of death that lies between a discovery and a cure by focusing on the regulatory approvals and marketing efforts necessary to deliver those products than they have in drug discovery?
Saturday, April 24, 2021
Saturday, April 03, 2021
Consumer Perceptions, Misinformation, and Vaccine Hesitancy
In graduate school I focused on how consumer consumption patterns signal social viewpoints, and the role of information and misinformation in the process. Particularly interesting was the observation that some consumers had strongly held science based views related to some issues while simultaneously holding other views that were inconsistent with views of the larger scientific community. What could explain this? I hypothesized a utility maximizing model that involved world views and social harassment costs consistent with the idea that viewpoints that may be irrational based on an objective related to scientific truths and evidence can be rational from the standpoint of personal utility maximization. This isn't so different from the idea of coherence, from Kahneman's Thinking Fast and Slow, where they argue that the coherence of the story matters more than the quality of the evidence.
In 'Finding a vaccine for misinformation' authors address the challenges of misinformation as it relates to vaccine hesitancy and leverage some of the same behavioral economic frameworks. They explain:
"A coherent story works because our minds don't just encode facts and events into memory...we also store bottom line meaning or 'gist' and it is the stored gist, not the facts, that typically guides our beliefs and behaviors"
They go on to explain that our worldview (pre-existing internal stories based on our our mental tapestry of culture, knowledge, beliefs, and life experiences) determines which gist which is stored and resonates.
Part of their strategy for dealing with this is 'inoculating' consumers through gamification so that they are less susceptible to misinformation. I'm not sure gamification is the answer, but at the least what can be learned from this research definitely could lead to progress on this front:
"Introne believes that he can use this approach to target the weakest links in false narratives and bring people closer to changing their minds. He says that if he can deliver information that doesn’t conflict with a person’s belief state but still brings them around to a more accurate point of view, “then I’ve got a pretty powerful thing.”
This reflects a lot of what we have learned over the years. Simply presenting facts and evidence, telling people they are wrong on the internet so to speak, isn't going to change minds or behavior. Our communication has to be much more strategic with laser like intent.
References:
News Feature: Finding a vaccine for misinformation.Gayathri Vaidyanathan. Proceedings of the National Academy of Sciences Aug 2020, 117 (32) 18902-18905; DOI: 10.1073/pnas.2013249117 https://www.pnas.org/content/117/32/18902
Related References:
Information Avoidance and Image Concerns. Exley, Christine L and Kessler, Judd B. National Bureau of Economic Research. Working Paper No. 8376 January 2021. doi. 10.3386/w28376. http://www.nber.org/papers/w28376