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Insurance in vertically differentiated repair markets


  • Urmann, Oliver


In vertically differentiated repair markets with insured customers, insurance coverage increases price level, entry, and the high quality provider’s profits. In the market for pharmaceuticals, this should be taken into account when calculating the extent of patent periods.

Suggested Citation

  • Urmann, Oliver, 2012. "Insurance in vertically differentiated repair markets," Economics Letters, Elsevier, vol. 116(1), pages 121-123.
  • Handle: RePEc:eee:ecolet:v:116:y:2012:i:1:p:121-123 DOI: 10.1016/j.econlet.2012.02.004

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    References listed on IDEAS

    1. Bouckaert, Jan, 2000. "Monopolistic competition with a mail order business," Economics Letters, Elsevier, vol. 66(3), pages 303-310, March.
    2. Madden Paul & Pezzino Mario, 2011. "Oligopoly on a Salop Circle with Centre," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, January.
    3. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    4. Nina Pavcnik, 2002. "Do Pharmaceutical Prices Respond to Potential Patient Out-of-Pocket Expenses?," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 469-487, Autumn.
    5. Amy Finkelstein, 2007. "The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 1-37.
    6. Nell, Martin & Richter, Andreas & Schiller, Jörg, 2009. "When prices hardly matter: Incomplete insurance contracts and markets for repair goods," European Economic Review, Elsevier, vol. 53(3), pages 343-354, April.
    7. Noah Gans, 2002. "Customer Loyalty and Supplier Quality Competition," Management Science, INFORMS, vol. 48(2), pages 207-221, February.
    8. Michael H. Riordan, 1986. "Monopolistic Competition with Experience Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 265-279.
    9. Ş. Nuray Akın & Brennan C. Platt, 2014. "Insurance, Consumer Search, and Equilibrium Price Distributions," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 81(2), pages 397-429, June.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Insurance; Repair markets; Vertical differentiation;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets


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