Social learning and health plan choice.

Stanford University, USA.
The RAND Journal of Economics (Impact Factor: 1.49). 02/2006; 37(4):1-29. DOI: 10.1111/j.1756-2171.2006.tb00064.x
Source: PubMed

ABSTRACT I use data from the University of California to empirically examine the role of social learning in employees' choices of health plans. The basic empirical strategy starts with the observation that if social learning is important, health plan selections should appear to be correlated across employees within the same department. Estimates of discrete choice models in which individuals' perceived payoffs are influenced by coworkers' decisions reveal a significant (but not dominant) social effect. The strength of the effect depends on factors such as the department's size or the employee's demographic distance from her coworkers. The estimated effects are present even when the model allows for unobserved, department-specific heterogeneity in employee preferences, so the results cannot be explained away by unobservable characteristics that are common to employees of the same department.

  • Information Systems Research 01/2015; 26(1):150123055447001. DOI:10.1287/isre.2014.0555 · 2.15 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: We study savings decisions following a financial reform that allowed employees to choose savings funds. Using a unique dataset from a large employer in Israel we find that a year after the reform, 7% of the employees switched out of the default fund. Most, to a fund that did not outperform others in observable measures, yet, had high management fees. Choice of fund is strongly affected by the employee’s social environment. Exploiting within-department variation in peer groups, we find that savings decisions are strongly influenced by the choices of co-ethnics. Interviews also point to the influence of non-professional colleagues.
    Journal of Economic Behavior & Organization 05/2013; 106. DOI:10.2139/ssrn.2011338 · 1.01 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Under Medicare Part D, people choose prescription drug insurance from many alternatives offered by private insurers. We examine enrollees' actions in 2006 and 2007 using panel data. The non-poor population substantially reduced overspending from 2006 to 2007, with the greatest improvements by those who switched plans and who overspent the most in 2006. The oldest consumers and those with Alzheimer's improved as much as average or better, suggesting that real-world mechanisms help overcome cognitive limitations. The poor population also improved and increasingly utilized their continuous open enrollment to reduce their costs. Market evolu-tion and consumer learning likely explain these gains.
    American Economic Review 04/2010; 102(6). DOI:10.1257/aer.102.6.2639 · 2.69 Impact Factor


Available from