Understanding Doctor Decision Making: The Case of Depression Treatment

Janet M. Currie, W. Bentley MacLeod

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

Treatment for depression is complex, requiring decisions that may involve trade-offs between exploiting treatments with the highest expected value and experimenting with treatments with higher possible payoffs. Using patient claims data, we show that among skilled doctors, using a broader portfolio of drugs predicts better patient outcomes, except in cases where doctors' decisions violate loose professional guidelines. We introduce a behavioral model of decision making guided by our empirical observations. The model's novel feature is that the trade-off between exploitation and experimentation depends on the doctor's diagnostic skill. The model predicts that higher diagnostic skill leads to greater diversity in drug choice and better matching of drugs to patients even among doctors with the same initial beliefs regarding drug effectiveness. Consistent with the finding that guideline violations predict poorer patient outcomes, simulations of the model suggest that increasing the number of possible drug choices can lower performance.

Original languageEnglish (US)
Pages (from-to)847-878
Number of pages32
JournalEconometrica
Volume88
Issue number3
DOIs
StatePublished - May 1 2020

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Keywords

  • bounded rationality
  • Decision theory
  • expert decision making
  • human capital
  • learning

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