Testing for Price Leadership and for Reputation Goods Effects: Swedish Dental Services
Sweden deregulated the prices for dental services in 1999. Twenty-one Swedish county councils provide public dental services. They compete with 3000 small independent private firms. Public and private providers are subsidized by the government to an equal extent, but most of the costs are borne by the consumers. The private firms’ price setting is strongly influenced by the county councils’ prices after the deregulation, i.e. the county councils act as price leaders. Prices increased more in large markets, which is consistent with dental services being a reputation good. There was no effect of the dentist’s gender on prices, but immigrant dentists increased their prices slightly less than native ones.
|Date of creation:||11 Oct 2004|
|Date of revision:|
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- Raymond J. Deneckere & Dan Kovenock, 1992.
Review of Economic Studies,
Oxford University Press, vol. 59(1), pages 143-162.
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