Do Expert Panelists Herd? Evidence from FDA Committees

55 Pages Posted: 28 Oct 2019 Last revised: 3 Jun 2020

See all articles by Melissa Newham

Melissa Newham

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich; KU Leuven

Rune Midjord

Copenhagen Business School

Date Written: October 1, 2019

Abstract

We develop a structural model to address the question whether, and to what extent, expert panelists engage in herd behavior when voting on important policy questions. Our data comes from FDA advisory committees voting on questions concerning the approval of new drug applications. We utilize a change in the voting procedure from sequential to simultaneous voting to identify herding. Estimates suggest that around half of the panelists are willing to vote against their private assessment if votes from previous experts indicate otherwise and, on average, 9 percent of the sequential votes are actual herd-votes. Temporary committee members are more prone to herding than regular (standing) members. We find that simultaneous voting improves information aggregation given our estimates.

Keywords: herd behavior, expert committees, structural estimation, FDA, public health

JEL Classification: D72, D82, D83, D91, I10, I18

Suggested Citation

Newham, Melissa and Midjord, Rune, Do Expert Panelists Herd? Evidence from FDA Committees (October 1, 2019). DIW Berlin Discussion Paper No. 1825 (2019), Available at SSRN: https://ssrn.com/abstract=3476536 or http://dx.doi.org/10.2139/ssrn.3476536

Melissa Newham (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Zürichbergstrasse 18
Zurich, 8092
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium
3000 (Fax)

Rune Midjord

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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