Medical Decision-Making by Patients and Providers under Uncertainty and in the Presence of Antibiotic Resistance

We analyze the medical decision-making process, first from the perspective of a patient and then from the perspective of a health care provider. Using a decision-tree, we describe the different actions a mother can take to treat her daughter, who she suspects has otitis media—an ear infection. Next, we use comparative statics and numerical analysis to show how altering inputs (magnitude of infection probability, cost terms) can affect the outputs. Finally, we examine how different socioeconomic variables influence the mother’s decision making process. With regard to the health care provider, we delineate the setting in which the physician operates and then derive the long run expected cost of providing health care that this physician seeks to minimize. Next, we set up the cost minimization problem and describe the optimal solution implicitly. Finally, we explain why this implicit characterization of the optimal solution is all that is possible analytically.