Zero-sum thinking and economic policy.

A main tenet of folk economics is the assumption that the world is zero-sum. Many implications stem from this assumption. These include: beliefs regarding taxation; beliefs regarding economic regulation; beliefs regarding inequality; and the core of Marxist economics. Zero-sum folk economic thinking is short-term and deals with distribution; standard economic thinking deals with the size of the pie and is longer-term.

Altruism and self interest in medical decision making.

We seem to prefer that medicine and medical care be provided through altruistic motives. Even the pharmaceutical industry justifies its behavior in terms of altruistic purposes. But economists have known since Adam Smith that self-interested behavior can create large and growing social benefits. This is true for medical care as well as for other goods. First, I consider specifically the case of pharmaceutical promotion, both to physicians and to consumers. I argue that such promotion is highly beneficial to patients and leads to health improvements. I consider some criticisms of promotion, and show that they are misguided. I then provide some evolutionary explanations for our erroneous beliefs about medical care.

The cost-effectiveness of direct-to-consumer advertising for prescription drugs.

In this paper we use published information to analyze the economic value of Direct to Consumer Advertising (DTCA). The reviewed research finds that DTCA leads to increased demand for the advertised drug and that the effect of the drug tends to be class-wide rather than product specific. There is weak evidence that DTCA may increase compliance and improve clinical outcomes. However, there is little research on the effect of DTCA on inappropriate prescribing or on the characteristics of patients who respond to treatment. On net, if the advertised drugs are cost effective on average and the patients using the drugs in response to the advertisement are similar to other users, DTCA is likely cost effective. Overall, the literature to date is consistent with the idea that DTCA is beneficial, but further research is needed before definitive conclusions can be drawn.

Public goods and the evolution of altruism: the case of law.

Though Hamilton's rule is commonly interpreted as relating to two individuals, an alternative interpretation is that it can apply to an altruistic act with respect to a large group of related persons, such as an ethnic group. Then provision of a public good to such a group can be explained by Hamilton's rule. An important class of public goods is the provision of a "legal system" for the group. Provision of this good can have positive feedback effects: as there is more enforcement, it pays to define more complex and valuable rights, and in turn such rights lead to larger and more effective societies. As societies become larger, the ability to enforce rights increases because the number of enforcers increases. However, as in many other human activities, there may be two conflicting systems for provision of this good. There is the evolutionarily old system that would involve face to face transactions, often with kin. There is also a newer, rule-governed legal system for impersonal exchanges. These may be in conflict. The older rules may sometimes frustrate the more efficient newer system. Moreover, those persons who benefit from kin-based transaction networks may resist the creation of a formal legal system. I also note that altruism within the group may lead to xenophobia outside the group and thus to ethnic conflict. Finally, I discuss some evidence consistent with this analysis.