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An Alternative Perspective On Information Asymmetry; Implications For Consumer Authority In Physician Services Markets

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  • Richard B. Smith

Abstract

This paper looks at the impact of patient knowledge on utilization and quality in physician services markets, developing a theoretical framework based on an alternative to the “market failure” perspective first proposed by Arrow (1963). Specifically, this paper looks at how outcomes in physician services markets are determined by whether patient and physician knowledge are substitutes or complements in health production. Empirical testing of the theoretical predictions indicates patient and physician knowledge have changed from substitutes to complements in recent years, and that this change may be hindering a more consumer‐driven market from ensuring high quality outcomes.

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  • Richard B. Smith, 2005. "An Alternative Perspective On Information Asymmetry; Implications For Consumer Authority In Physician Services Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 665-699, September.
    • Handle: RePEc:bla:jemstr:v:14:y:2005:i:3:p:665-699
    DOI: 10.1111/j.1530-9134.2005.00078.x
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    References listed on IDEAS

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    Cited by:

    1. Fang Hai & Miller Nolan H. & Rizzo John & Zeckhauser Richard, 2011. "Demanding Customers: Consumerist Patients and Quality of Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-51, September.
    2. Barigozzi, Francesca & Levaggi, Rosella, 2008. "Emotions in physician agency," Health Policy, Elsevier, vol. 88(1), pages 1-14, October.
    3. Suziedelyte, Agne, 2012. "How does searching for health information on the Internet affect individuals' demand for health care services?," Social Science & Medicine, Elsevier, vol. 75(10), pages 1828-1835.
    4. Lukas, Daniel, 2010. "Patient autonomy and education in specific medical knowledge," Dresden Discussion Paper Series in Economics 07/10, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    5. Leonard, Kenneth L., 2008. "Is patient satisfaction sensitive to changes in the quality of care? An exploitation of the Hawthorne effect," Journal of Health Economics, Elsevier, vol. 27(2), pages 444-459, March.

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