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Price sensitive prescribers

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  • Neilson, William S.

Abstract

When prescribers are not price sensitive, prescriptions segment the duopoly market and the unique dominant strategy equilibrium has both firms setting the monopoly price. When some prescribers are price sensitive, manufacturers use mixed strategies but still earn positive expected profit.

Suggested Citation

  • Neilson, William S., 2009. "Price sensitive prescribers," Economics Letters, Elsevier, vol. 104(1), pages 20-22, July.
    • Handle: RePEc:eee:ecolet:v:104:y:2009:i:1:p:20-22
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    References listed on IDEAS

    as
    1. Ernst R. Berndt, 2002. "Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 45-66, Fall.
    2. Toshiaki Iizuka, 2007. "Experts' agency problems: evidence from the prescription drug market in Japan," RAND Journal of Economics, RAND Corporation, vol. 38(3), pages 844-862, September.
    3. Frank Windmeijer & Eric de Laat & Rudy Douven & Esther Mot, 2006. "Pharmaceutical promotion and GP prescription behaviour," Health Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 5-18, January.
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