Neuroeconomics

Ketamine and Depression, part 2

Following up on our earlier post on Ketamine and depression, Nature has a news feature providing more background on the topic.

Torture and Neuroeconomics: What on Earth is Tyler Cowen Talking About?

Tyler Cowen is the preeminent blogger at George Mason University. General Director of our favorite thinktank, epicure, and New York Times columnist (as an aside, I love it that Tyler's columns on the NYT website come with a giant picture of Paul Krugman in the right column). So when Tyler blogs on neuroeconomics, we obviously all listen. But his post on "Torture and Neuroeconomics" has me scratching my head.

The notion that "The part of the brain which suffers is not the same as the part of the brain which planned the crime." just doesn't make sense. Nobody in the US seriously considers using torture as a form of punishment for past transgressions but rather to obtain information on future attacks. Therefore it is not meant to reproach "the part of the brain which planned the crime." And before you get on about how torture can yield bad information, just remember that there is error in all information, the appropriate response is to discount its value accordingly.

Even if torture were used as punitive justice (think: Michael Fay) the fact that different parts of the brain process pain, make decisions, etc... does not imply that the brain does not function as a unitary mind. The occipital lobe is way in the back, but we still use it to inform our decision making process either in the present or through memories formed from visual information. Religious arguments aside, the notion that responsibility and retribution can or should be localized to individual body parts or brain regions seems like a bit of a stretch.

Critics sneer at Wal-Mart's $4 generic drugs

Wal Mart is offering 124 generic drugs (covered drugs available here) at $4 for a month's supply. Today's news features people tripping over themselves describing how this really isn't that big of a deal. Criticisms range from the fact that it will 'only' help the uninsured (because people with insurance already have low copays) to this quote, taken from the article linked above, "I think people are going to be disappointed when they go into the stores and find out their drug isn't there."

Well, hopefully, people who go to the store and find out their drug isn't there will ask their doctors to prescribe something else. Or, even better, doctors who treat uninsured patients will take price into consideration and prescribe an equivalent generic that is covered by the plan. But that would be bad.

Why? Because the real argument has nothing to do with cheaper drugs and more to do with the fact that some people hate Wal Mart just for being Wal Mart. In this story about providing $4 generics to everyone, Wal Mart's employee benefit package is called into question: "critics argue that Wal-Mart's coverage calls for a deductible that requires workers to pick up the first $1,000 in medical expenses, and the deductible rises to a maximum of $3,000 for families." What isn't mentioned is that this plan is one of several options being offered to Wal Mart employees. High deductibles mean that a single person working for Wal Mart can purchase this insurance for under $25 per month. It also doesn't mention that people covered by this plan get 3 trips to the doctor for $25 each, and includes matching employer contributions to a Health Savings Account. (source: NYT) How this detracts from the value provided to consumers from $4 generics is beyond me.

To me, cheaper drugs seem like a good thing, and chopping the price in half seems, well... really good. Even though I have health insurance, when I buy my drugs at Wal Mart my insurance company pays less for them which keeps premiums down for everyone. Even though some consumers who are fortunate enough to have a generic copay of less than $4 don't pay any more out of pocket (the national average of generic drug co pay is $10), fewer dollars are being spent on healthcare. So when someone says 'consumers won't benefit that much', they're ignoring the effect that cheaper drugs will have on the premiums consumers will have to pay in the future.

Unfortunately, a significant portion of America believes that individuals should not be responsible for their own health care. I'm not sure why employers are on the hook for my doctor visits but not groceries or car payments, but there it is. In this world view it is the obligation of every employer to insulate their employees from prices associated with different treatment options. The ultimate goal is to completely remove prices from the market for medicine, so that no individual is constrained by income when seeking medical treatment. Perhaps more importantly, nobody should receive a better standard of care simply because they can pay for it.

The strategy for advocates of government rationed healthcare is to demand that employers provide benefit packages that eliminate the incentive for healthcare consumers to spend wisely. Higher consumption leads to increases in cost, but low co-pays and deductibles insulate consumers from the effect that increased consumption has on the cost of medical care. Costs will continue to increase until firms are unable to cover them or individuals without insurance are no longer able to afford adequate health services, at which point political pressure will induce a fundamental restructuring of the health services market in the United States (see Medicare Part D and http://www.hlth.gov.bc.ca/waitlist/cardiac.html).

So, Wal Mart is bad because it encourages individuals to choose where to get their prescriptions filled on the basis of price resulting in competition (Target plans on matching the price) and lower total healthcare costs. Furthermore, Wal Mart offers its employees benefit plans that provide incentives for consumers to manage their costs through high-deductible plans for unforeseen medical problems paired with Health Savings Accounts for routine care. Its biggest sin is that these efforts put downward pressure on health care costs, frustrating the policy goal of moving the United States towards socialized medicine.

Communicating from within the Vegitative State

Most likely you have heard in the news about "awareness" or "consciousness" in the vegetative state. The paper is here, and the results should be enough to give people of all political persuasion great pause. Perhaps of the most significance, experimenters asked a patient with a vegetative state diagnosis to imagine that she was (1) playing tennis and (2) going through the rooms in her house during an fMRI. The subject's activations matched that of normal controls, indicating that she was actually thinking about doing those things.

The implications are staggering, and I'm sure nobody wants to think about the footage of Terri Schiavo (I have no information about her condition, and I'm not attempting to suggest that Ms. Schiavo's condition was comparable to the subject in this study) following an object with her eyes that was interleaved on television with talking heads arguing about whether or not that meant anything.

Neuroeconomics makes NYT

We would be remiss in our duties if we failed to note that Neuroeconomics was in the New York Times on Thursday by GMU's own Tyler Cowen, who has taken over Virginia Postrel's column. Tyler suggests that we take on political economy as well, which is not a bad suggestion, however I think that many voters make up their mind before they actually walk into the voting booth, thus the decision is made elsewhere. Furthermore, I think it would be difficult to re-create the actual experience of voting in the lab with an experiment, as the actual benefit of voting to one's self is almost infinitesimally small in addition to the reward (financial or otherwise) that subjects experience to induce them to participate in a study to begin with.

One question one might hope to get at is why people bother to vote at all given such a small uncertain return. I can envision an experiment where experimenters get absentee ballots for the subjects in advance and give them the choice between some other work task (for money) and voting (for no money). They would have to be actual ballots to induce the appropriate incentives. (Even better from a grant-writing perspective would be if we could get a jurisdiction to allow us to use one of the new computerized voting machines)

The problem with such a design would be that whatever reward we give them for completing the alternate task would be a de-facto reservation price for voting. Another option might be to pay them a flat rate and give them the choice between voting and completing an experimental task without a variable reward. I feel like in order for this experiment to be successful some deception might have to be used as well as some cooperation from the local government in order to get absentee ballots for our subjects, otherwise we might get (a) thrown in jail for tampering with an election, and (b) a skewed sample of volunteers who are naturally interested in politics if we start asking questions about absentee ballots during the screening process. Scientists who have embarked on a second career as election commissioners and are willing to entertain such a project are welcome to contact me.

The only question I would ask Tyler about his article is: why the hyphen? (The title of his piece is "Enter the Neuro-Economists: Why Do Investors Do What They Do?") My only guess is that some enforce or the NYT style guide demanded its insertion as Neuroeconomics is not yet in a dictionary.