IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v17y2020i4p1326-d322392.html
   My bibliography  Save this article

Exploring the Effect of Market Conditions on Price Premiums in the Online Health Community

Author

Listed:
  • Chaoran Li

    (School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai 200433, China
    Institute of Fintech, Shanghai University of Finance and Economics, Shanghai 200433, China)

  • E. Zhang

    (School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai 200433, China
    Guizhou Key Laboratory of Big Data Statistics Analysis, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Jingti Han

    (School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai 200433, China
    Institute of Fintech, Shanghai University of Finance and Economics, Shanghai 200433, China)

Abstract

Online health communities allow doctors to fully use existing medical resources to serve remote patients. They broaden and diversify avenues of interaction between doctors and patients using Internet technology, which have built an online medical consultation market. In this study, the theory of supply and demand was adopted to explore how market conditions of online doctor resources impact price premiums of doctors’ online service. Then, we investigated the effect of the stigmatized diseases. We used resource supply and resource concentration to characterize the market conditions of online doctor resources and a dummy variable to categorize whether the disease is stigmatized or ordinary. After an empirical study of the dataset (including 68,945 doctors), the results indicate that: (1) the supply of online doctor resources has a significant and negative influence on price premiums; (2) compared with ordinary diseases, doctors treating stigmatized diseases can charge higher price premiums; (3) stigmatized diseases positively moderate the relationship between resource supply and price premiums; and (4) the concentration of online doctor resources has no significant influence on price premiums. Our research demonstrates that both the market conditions of online doctor resources and stigmatized diseases can impact price premiums in the online medical consultation market. The findings provide some new and insightful implications for theory and practice.

Suggested Citation

  • Chaoran Li & E. Zhang & Jingti Han, 2020. "Exploring the Effect of Market Conditions on Price Premiums in the Online Health Community," IJERPH, MDPI, vol. 17(4), pages 1-14, February.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:4:p:1326-:d:322392
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/17/4/1326/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/17/4/1326/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eric J. Johnson & Wendy W. Moe & Peter S. Fader & Steven Bellman & Gerald L. Lohse, 2004. "On the Depth and Dynamics of Online Search Behavior," Management Science, INFORMS, vol. 50(3), pages 299-308, March.
    2. Joanna Stavins, 2001. "Price Discrimination in the Airline Market: The Effect of Market Concentration," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 200-202, February.
    3. Jason M. Fletcher, 2010. "Social interactions and smoking: evidence using multiple student cohorts, instrumental variables, and school fixed effects," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 466-484, April.
    4. Maxwell, Sarah, 2002. "Rule-based price fairness and its effect on willingness to purchase," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 191-212, April.
    5. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    6. Januszewski, Silke I. & Koke, Jens & Winter, Joachim K., 2002. "Product market competition, corporate governance and firm performance: an empirical analysis for Germany," Research in Economics, Elsevier, vol. 56(3), pages 299-332, September.
    7. Susan F. Lu & Huaxia Rui, 2018. "Can We Trust Online Physician Ratings? Evidence from Cardiac Surgeons in Florida," Management Science, INFORMS, vol. 64(6), pages 2557-2573, June.
    8. Puneet Manchanda & Grant Packard & Adithya Pattabhiramaiah, 2015. "Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Customer Community," Marketing Science, INFORMS, vol. 34(3), pages 367-387, May.
    9. Dufwenberg, Martin & Gneezy, Uri, 2000. "Price competition and market concentration: an experimental study," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 7-22, January.
    10. repec:lmu:muenar:19529 is not listed on IDEAS
    11. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    12. Donghua Chen & Runtong Zhang & Kecheng Liu & Lei Hou, 2018. "Knowledge Discovery from Posts in Online Health Communities Using Unified Medical Language System," IJERPH, MDPI, vol. 15(6), pages 1-16, June.
    13. Kwon, Wi-Suk & Lennon, Sharron J., 2009. "Reciprocal Effects Between Multichannel Retailers’ Offline and Online Brand Images," Journal of Retailing, Elsevier, vol. 85(3), pages 376-390.
    14. Mark V. Pauly & Mark A. Satterthwaite, 1981. "The Pricing of Primary Care Physicians' Services: A Test of the Role of Consumer Information," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 488-506, Autumn.
    15. Xinyi Lu & Runtong Zhang & Xiaomin Zhu, 2019. "An Empirical Study on Patients’ Acceptance of Physician-Patient Interaction in Online Health Communities," IJERPH, MDPI, vol. 16(24), pages 1-10, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fluet, Claude & Garella, Paolo G., 2002. "Advertising and prices as signals of quality in a regime of price rivalry," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 907-930, September.
    2. Paulson Gjerde, Kathy A. & Slotnick, Susan A., 2004. "Quality and reputation: The effects of external and internal factors over time," International Journal of Production Economics, Elsevier, vol. 89(1), pages 1-20, May.
    3. Justin P. Johnson & David P. Myatt, 2003. "Multiproduct Quality Competition: Fighting Brands and Product Line Pruning," American Economic Review, American Economic Association, vol. 93(3), pages 748-774, June.
    4. Butler, Jeffrey V. & Carbone, Enrica & Conzo, Pierluigi & Spagnolo, Giancarlo, 2020. "Past performance and entry in procurement: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 179-195.
    5. Wipo, 2013. "World Intellectual Property Report 2013 - Brands: Reputation and Image in the Global Marketplace," WIPO Economics & Statistics Series, World Intellectual Property Organization - Economics and Statistics Division, number 2013:944, April.
    6. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2010. "Price and quality in spatial competition," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 471-480, November.
    7. Ebbing, Tobias & Lüthje, Christian, 2021. "Pricing decisions of consumer innovators," Research Policy, Elsevier, vol. 50(8).
    8. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 18, pages 567-614, Elsevier.
    9. Gerhard O. Orosel & Klaus G. Zauner, 2011. "Quality Diversity and Prices in Markets for Experience Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 709-738, September.
    10. Gerhard Orosel & Klaus G. Zauner, 2004. "Vertical Product Differentiation When Quality is Unobservable to Buyers," CESifo Working Paper Series 1271, CESifo.
    11. Etro, Federico, 2016. "Research in economics and industrial organization," Research in Economics, Elsevier, vol. 70(4), pages 511-517.
    12. Keith Brouhle & Madhu Khanna, 2007. "Information And The Provision Of Quality Differentiated Products," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 377-394, April.
    13. Calvano, Emilio & Polo, Michele, 2021. "Market power, competition and innovation in digital markets: A survey," Information Economics and Policy, Elsevier, vol. 54(C).
    14. Bilanakosa, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2017. "Worker Training and Quality Competition," GLO Discussion Paper Series 137, Global Labor Organization (GLO).
    15. Lee, Seul Ki, 2015. "Quality differentiation and conditional spatial price competition among hotels," Tourism Management, Elsevier, vol. 46(C), pages 114-122.
    16. Lifeng He & Dongmei Han & Xiaohang Zhou & Zheng Qu, 2020. "The Voice of Drug Consumers: Online Textual Review Analysis Using Structural Topic Model," IJERPH, MDPI, vol. 17(10), pages 1-18, May.
    17. Kalaignanam, Kartik & Kushwaha, Tarun & Rajavi, Koushyar, 2018. "How Does Web Personalization Create Value for Online Retailers? Lower Cash Flow Volatility or Enhanced Cash Flows," Journal of Retailing, Elsevier, vol. 94(3), pages 265-279.
    18. Bayer, Ralph-C., 2010. "Intertemporal price discrimination and competition," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 273-293, February.
    19. Carlton, Dennis W. & Perloff, Jeffrey M., 1989. "The Economics of Information," Research Reports 25156, University of Connecticut, Food Marketing Policy Center.
    20. Roe, Brian E. & Sheldon, Ian M., 2001. "The Impacts of Labeling on the Production and Trade of Vertically Differentiated Goods with Process Attributes," 2001 Annual meeting, August 5-8, Chicago, IL 20451, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:17:y:2020:i:4:p:1326-:d:322392. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.