  Multiple hypothesis testing practices vary widely, without consensus on which
are appropriate when. This paper provides an economic foundation for these
practices designed to capture processes of scientific communication, such as
regulatory approval on the basis of clinical trials. In studies of multiple
treatments or sub-populations, adjustments may be appropriate depending on
scale economies in the research production function, with control of classical
notions of compound errors emerging in some but not all cases. In studies with
multiple outcomes, indexing is appropriate and adjustments to test levels may
be appropriate if the intended audience is heterogeneous. Data on actual costs
in the drug approval process suggest both that some adjustment is warranted in
that setting and that standard procedures are overly conservative.
