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Agency in Health-Care: Are Medical Care-Givers Perfect Agents?

Author

Listed:
  • Neuman, Einat

    (Tel Aviv University)

  • Neuman, Shoshana

    (Bar-Ilan University)

Abstract

It has been suggested in the literature that a source of incompleteness in the agency relationship between the doctor and the patient is that the provider may respond to an incomplete or biased perception of the patient’s interests. However, this has not been shown empirically. This paper is novel in presenting an empirical test of the fundamental assumption of the agency model that health care professionals understand what their patients want. Discrete Choice Experiments (DCEs) are conducted simultaneously within samples of patients (women who gave birth) and care-givers (doctors and nurses), to elicit and contrast patients’ authentic preferences (for five maternity ward attributes) with what care-givers believe them to be. Conclusion: agents have a biased perception of principals’ preferences, and therefore a complete agency relationship does not exist. Our findings add a novel empirical contribution to the agency relationship literature. Moreover, parallel preference patterns of patients and care-givers are certainly of much interest to the field of health economics: Informing the unaware medical care-givers about the patients' preferences, will improve treatment and patients' satisfaction.

Suggested Citation

  • Neuman, Einat & Neuman, Shoshana, 2007. "Agency in Health-Care: Are Medical Care-Givers Perfect Agents?," IZA Discussion Papers 2727, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2727
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    References listed on IDEAS

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    1. Gaynor, Martin, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-255, Spring.
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    Cited by:

    1. Neuman, Tzahi & Neuman, Einat & Neuman, Shoshana, 2010. "Explorations of the effect of experience on preferences for a health-care service," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(3), pages 407-419, June.
    2. Alessandro Mengoni & Chiara Seghieri & Sabina Nuti, 2013. "The application of discrete choice experiments in health economics: a systematic review of the literature," Working Papers 201301, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.

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    More about this item

    Keywords

    discrete choice experiment; preferences; health-care; principal-agent relationship; maternity wards;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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