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Reputational concerns with altruistic providers

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  • Olivella, Pau
  • Siciliani, Luigi

Abstract

We study a model of reputational concerns when doctors differ in their degree of altruism and they can signal their altruism by their (observable) quality. When reputational concerns are high, following the introduction or enhancement of public reporting, the less altruistic (bad) doctor mimics the more altruistic (good) doctor. Otherwise, either a separating or a semi-separating equilibrium arises: the bad doctor mimics the good doctor with probability less than one. Pay-for-performance incentive schemes are unlikely to induce crowding out, unless some dimensions of quality are unobservable. Under the pooling equilibrium a purchaser can implement the first-best quality by appropriately choosing a simple payment scheme with a fixed price per unit of quality provided. This is not the case under the separating equilibrium. Therefore, policies that enhance public reporting complement pay-for-performance schemes.

Suggested Citation

  • Olivella, Pau & Siciliani, Luigi, 2017. "Reputational concerns with altruistic providers," Journal of Health Economics, Elsevier, vol. 55(C), pages 1-13.
    • Handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:1-13
    DOI: 10.1016/j.jhealeco.2017.05.003
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    3. Anthony Scott & Peter Sivey, 2022. "Motivation and competition in health care," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1695-1712, August.
    4. Hui Huang & Juan Zhang & Xuan Ren & Xiang Zhou, 2018. "Greenness and Pricing Decisions of Cooperative Supply Chains Considering Altruistic Preferences," IJERPH, MDPI, vol. 16(1), pages 1-31, December.
    5. Jianyue Liu & Zhiqiang Ma, 2023. "Optimal quality regulation on the online health platform," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-17, December.
    6. Yu Xia & Jing Li & Zhongyang Zhang, 2023. "Effects of price cap regulation on pharmaceutical supply chain under the zero markup drug policy," Operational Research, Springer, vol. 23(4), pages 1-27, December.
    7. Attema, Arthur E. & Galizzi, Matteo M. & Groß, Mona & Hennig-Schmidt, Heike & Karay, Yassin & L’Haridon, Olivier & Wiesen, Daniel, 2023. "The formation of physician altruism," Journal of Health Economics, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Reputation; Altruism; Doctors; Name and shame policies; Pay for performance;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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