ICES Experimental Economics Brown Bag Lecture

Quotas and the Opioid Crisis: Evidence from a Laboratory Experiment

Thursday, October 21, 2021 12:00 PM to 1:00 PM
Online Location, Zoom Meeting

ICES Experimental Economics Brown Bag Lecture

The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:

Yue Deng

George Mason University

Quotas and the Opioid Crisis: Evidence from a Laboratory Experiment

 

Please contact ICES Office Manager (sbahabib@gmu.edu) for Zoom link.

 

Abstract

The opioid crisis is responsible for hundreds of thousands of deaths and trillions of dollars in costs. Over-availability and over-accessibility of opioids due to the over prescription of physicians contribute substantially to those numbers. In response to the current trend of decreasing prescriptions each year, the Drug Enforcement Administration (DEA) has embarked on a campaign to reduce the Aggregate Production Quota. However, the way behaviors of physicians and patients might change with reduced quotas remains unclear. Drawing on Schnell's (2017) model of secondary markets and based upon our previous findings of over prescriptions when the secondary market is present (Deng and Houser, 2021), we design a laboratory experiment to investigate how the quotas affect patient and physician behaviors. We find that when quotas are present, patients visit physicians less frequently and physicians becomes stricter in prescribing than in the absence of quotas. Consequently, we find that introducing quotas reduces total consumption of opioids, and positively impacts overall health outcomes. Our results provide rigorous evidence that quota policies aimed at reducing the total supply can contribute significantly to mitigating the opioid crisis.

 

For more information about the Brown Bag Lectures, please visit the Brown Bag Schedule homepage.

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