[Statlist] Research Seminar in Statistics *FRIDAY 18 OCTOBER 2019* GSEM, University of Geneva

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Dear All,

We are pleased to invite you to our next Research Seminar.

Looking forward to seeing you


Organizers :                                                                                   
E. Cantoni - S. Engelke - D. La Vecchia - E. Ronchetti
S. Sperlich - F. Trojani - M.-P. Victoria-Feser


FRIDAY 18 OCTOBER 2019 at 11:15am, Uni-Mail M 5220

An Economic Theory of Statistical Testing

Aleksey TETENOV - University of Geneva, Geneva School of Economics and Management

ABSTRACT:
This paper models the use of statistical hypothesis testing in regulatory approval. A privately informed agent proposes an innovation. Its approval is beneficial to the proponent, but potentially detrimental to the regulator. The proponent can conduct a costly clinical trial to persuade the regulator. I show that the regulator can screen out all ex-ante undesirable proponents by committing to use a simple statistical test. Its level is the ratio of the trial cost to the proponent's benefit from approval. In application to new drug approval, this level is around 15% for an average Phase III clinical trial.


Visit the website: https://www.unige.ch/gsem/en/research/seminars/rcs/