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Advertising and Entry: The Case of Physician Services

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Author Info
Rizzo, John A
Zeckhauser, Richard J

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Abstract

This paper examines the entry implications of physician advertising. Evidence suggests that advertising inhibited entry into this market. Nevertheless, experienced physicians (incumbents), to whom advertising would offer the greatest financial benefit, in fact advertise less--a paradox that may be explained by nonfinancial concerns, such as unwillingness to break well-internalized professional norms against advertising. Physician advertising has risen sharply in recent years and it appears that this trend will continue. If incumbents increasingly resort to advertising, there could be substantial redistribution of income from less-well-established physicians to better-established ones. Copyright 1990 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 98 (1990)
Issue (Month): 3 (June)
Pages: 476-500
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Handle: RePEc:ucp:jpolec:v:98:y:1990:i:3:p:476-500

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  1. Geroski, Paul A & Mazzucato, Mariana, 2001. "Advertising and the Evolution of Market Structure in the US Car Industry," CEPR Discussion Papers 2860, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Martin Gaynor, 1995. "Issues in the Industrial Organization of the Market for Physician Services," NBER Working Papers 4695, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Paolo Coccorese, 2001. "Strategic Advertising for Entry Deterrence Purposes," CELPE Discussion Papers 61, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy. [Downloadable!]
  4. Robert Bloomfield & Vrinda Kadiyali, 2005. "How Verifiable Cheap-Talk Can Communicate Unverifiable Information," Quantitative Marketing and Economics, Springer, vol. 3(4), pages 337-363, December. [Downloadable!] (restricted)
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