Costly sequential experimentation in Health Technology Assessment

Thursday 1 December 2016, 2.00PM to 3.15pm

Speaker(s): Professor Jacco Thijssen, Chair of Finance, The York Management School, University of York

Abstract: We study the optimal investment/abandonment decision for a project, where costly sequential experimentation provides information about its true profitability. We derive the optimal decision rule by appropriately extending the Bayesian framework of sequential hypothesis testing. The optimal decision time takes the form of the first exit time of a particular inaction region. We find that increased noise in the observations lowers the value of the project, and that the effect on the expected time at which a decision is taken is ambiguous. Delays in observations affect both project value and the inaction region. The model is illustrated with a health technology assessment application using data on standard versus robot-assisted laporascopic prostatectomy.

Location: ARRC Auditorium A/RC/014

Who to contact

For more information on these seminars, contact:

Maria Jose Aragon
mariajose.aragonaragon@york.ac.uk
Jessica Ochalek
jessica.ochalek@york.ac.uk

If you are not a member of University of York staff and are interested in attending the seminar, please contact Kerry.atkinson@york.ac.uk so that we can ensure we have sufficient space

CHE Seminar Programme

  • Thursday 12 January 2017
    Jon Sussex, Chief Economist, RAND Europe
  • Thursday 9 February 2017
    Richard Murray, Kings Fund