We thank three anonymous referees for valuable comments and suggestions. Comments from seminar participants at EARIE 2009 and the 3rd Meeting of the Portuguese Economic Journal, 2009, are also appreciated.
Hospital Competition and Quality with Regulated Prices†
Article first published online: 23 MAY 2011
© The editors of the Scandinavian Journal of Economics 2011.
The Scandinavian Journal of Economics
Volume 113, Issue 2, pages 444–469, June 2011
How to Cite
Brekke, K. R., Siciliani, L. and Straume, O. R. (2011), Hospital Competition and Quality with Regulated Prices. The Scandinavian Journal of Economics, 113: 444–469. doi: 10.1111/j.1467-9442.2011.01647.x
- Issue published online: 23 MAY 2011
- Article first published online: 23 MAY 2011
- First version submitted April 2009;, final version received March 2010.
- Hospital competition;
We analyse the effect of competition on quality in hospital markets with regulated prices, considering the effect of both introducing competition (monopoly versus competition) and increasing competition through either lower transportation costs (increased substitutability) or a higher number of hospitals. With semi-altruistic providers and a fairly general cost structure, we show that the relationship between competition and quality is generally ambiguous. In contrast to the received body of theoretical literature, this is consistent with, and potentially explains, the mixed empirical evidence.