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A shirking theory of referrals

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  • Damien S.Eldridge

    ()
    (School Economics, La Trobe University)

Abstract

The health care industry in some countries displays a gated structure. Rather than approaching a specialist directly, a patient will first seek a referral from a general practitioner. We provide one possible explanation for such an industry structure. If the outcome of treatment depends on the effort exerted by the treating specialist, then a market failure might occur. By aggregating many patients, general practitioners can sometimes create an artificial long- run relationship between a patient and a specialist that otherwise would have a short-run relationship. Such an artificial long-run relationship reduces the incidence of shirking on the part of the specialist.

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Bibliographic Info

Paper provided by School of Economics, La Trobe University in its series Working Papers with number 2013.01.

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Length: 31 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:trb:wpaper:2013.01

Note: ISSN-1837-2198
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Keywords: Gatekeepers; Reputation; Moral Hazard; Referral;

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Cited by:
  1. Damien S Eldridge, 2007. "A Learning Theory of Referrals," Working Papers 2007.06, School of Economics, La Trobe University.
  2. Damien S Eldridge, 2007. "A Shirking Theory of Referrals," Working Papers 2007.05, School of Economics, La Trobe University.

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