Testimonials Do Not Convert Patients from Brand to Generic Medication

John  Beshears; James J. Choi; David  Laibson; Brigitte C. Madrian; Gwendolyn  Reynolds

Article | American Journal of Managed Care | September 2013

Testimonials Do Not Convert Patients from Brand to Generic Medication

by John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian and Gwendolyn Reynolds

Abstract

Objectives: To assess whether the addition of a peer testimonial to an informational mailing increases conversion rates from brand name prescription medications to lower-cost therapeutic equivalents, and whether the testimonial's efficacy increases when information is added about an affiliation the quoted individual shares with the recipient.

Research Design and Methods: A total of 5,498 union members were randomly assigned to receive 1 of 3 different informational letters: 1 without a testimonial (No Testimonial Group), 1 with a testimonial from a person whose shared union affiliation with the recipient was not disclosed (Unaffiliated Testimonial Group), and 1 with a testimonial from a person whose shared union affiliation with the recipient was disclosed (Affiliated Testimonial Group).

Results: The conversion rate for the No Testimonial Group was 12.2%, which is higher than the Unaffiliated Testimonial Group rate of 11.3% and the Affiliated Testimonial Group rate of 11.7%. The differences between the groups are not statistically significant.

Conclusions: Short peer testimonials do not increase the impact of a mailed communication on conversion rates to lower-cost, therapeutically equivalent medications, even when the testimonial is presented as coming from a more socially proximate peer.

Keywords: testimonial; peer information; social proximity; communication; generic medication; Familiarity; Marketing Communications; Decision Choices and Conditions; Identity; Health Care and Treatment; Marketing Reference Programs; Power and Influence; Brands and Branding; Health Industry;

Format: Print

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Citation:

Beshears, John, James J. Choi, David Laibson, Brigitte C. Madrian, and Gwendolyn Reynolds. "Testimonials Do Not Convert Patients from Brand to Generic Medication." American Journal of Managed Care 19, no. 9 (September 2013): e314–e316.

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Article | Journal of Public Economics | March 2020

Which Early Withdrawal Penalty Attracts the Most Deposits to a Commitment Savings Account?

John Beshears, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian and Jung Sakong

Previous research has shown that some people voluntarily use commitment contracts that restrict their own choice sets. We study how people divide money between two accounts: a liquid account that permits unrestricted withdrawals and a commitment account that is randomly assigned in a between-subject design to have either a 10% early withdrawal penalty, or a 20% early withdrawal penalty, or not to allow early withdrawals at all (i.e., an infinite penalty). When the liquid account and the commitment account pay the same interest rate, higher early withdrawal penalties attract more commitment account deposits. This pattern is predicted by the hypothesis that some participants are partially or fully sophisticated present-biased agents. Such agents perceive that higher penalties generate greater scope for commitment by disincentivizing (penalized) early withdrawals. The experiment also shows that when the commitment account pays a higher interest rate than the liquid account, the positive empirical slope relating penalties and commitment deposits is flattened, suggesting that naïve present-biased agents or agents with standard exponential discounting are also in our sample. Across all of our experimental treatments, higher early withdrawal penalties on the commitment account sometimes increase and never reduce allocations to the commitment account.

Keywords: quasi-hyperbolic discounting; present bias; sophistication; naiveté; commitment; Flexibility; savings; Contract Design; defined contribution retirement plan; 401 (k); IRA; Saving; Behavior; Contracts; Design; Interest Rates;

Citation:

Beshears, John, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian, and Jung Sakong. "Which Early Withdrawal Penalty Attracts the Most Deposits to a Commitment Savings Account?" Art. 104144. Journal of Public Economics 183 (March 2020). View Details

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Testimonials Do Not Convert Patients from Brand to Generic Medication

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