Controls, belief updating, and bias in medical RCTs

Gilles Chemla and Christopher A. Hennessy

Journal of Economic Theory, 2019, vol. 184, issue C

Abstract: We develop a formal model of placebo effects. If subjects in seemingly-ideal single-stage RCTs update beliefs about breakthroughs based upon personal physiological responses, mental effects differ across medications received, treatment versus control. Consequently, the average cross-arm health difference becomes a biased estimator. Constructively, we show: bias can be altered through choice of control; higher-efficacy controls mitigate upward bias; and efficacy states can be revealed through controls of intermediate efficacy or controls that mimic a subset of efficacy states. Consistent with experimental evidence, our theory implies outcomes within-arm and cross-arm differences can be non-monotone in treatment probability. Finally, we develop novel differences-in-differences and triangle equality tests to detect RCT bias.

Keywords: Belief updating; Medical RCTs; Bias; Control; Treatment (search for similar items in EconPapers)
JEL-codes: C90 D04 I10 I11 K32 O3 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:184:y:2019:i:c:s0022053119300808

DOI: 10.1016/j.jet.2019.07.016

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