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The value of private information in the physician-patient relationship: a gametheoretic account

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  • K.J.M. De Jaegher

Abstract

This paper presents a game-theoretical model of the physician-patient relationship. There is a conflict of interest between physician and patient, in that the physician prefers the patient to always obtain a particular treatment, even if the patient would not consider this treatment in his interest. The patient obtains imperfect cues of whether or not he needs the treatment. The effect is studied of an increase in the quality of the patient’s private information, in the form of an improvement in the quality of his cues. It is shown that when the patient’s information improves in this sense, he may either become better off or worse off. The precise circumstances under which either result is obtained, are derived.

Suggested Citation

  • K.J.M. De Jaegher, 2012. "The value of private information in the physician-patient relationship: a gametheoretic account," Working Papers 12-23, Utrecht School of Economics.
  • Handle: RePEc:use:tkiwps:1223
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    File URL: https://dspace.library.uu.nl/bitstream/handle/1874/309936/Discussion_paper_12_23.pdf
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    References listed on IDEAS

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    1. Paul Calcott, 1999. "Demand inducement as cheap talk," Health Economics, John Wiley & Sons, Ltd., vol. 8(8), pages 721-733.
    2. Bin Xie & David M. Dilts & Mikhael Shor, 2006. "The physician-patient relationship: the impact of patient-obtained medical information," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 813-833.
    3. Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-574, September.
    4. Barigozzi, Francesca & Levaggi, Rosella, 2008. "Emotions in physician agency," Health Policy, Elsevier, vol. 88(1), pages 1-14, October.
    5. Bruno Bassan & Olivier Gossner & Marco Scarsini & Shmuel Zamir, 2003. "Positive value of information in games," International Journal of Game Theory, Springer;Game Theory Society, pages 17-31.
    6. Edward E. Schlee, 1996. "The Value of Information About Product Quality," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 803-815, Winter.
    7. Kris De Jaegher & Marc Jegers, 2001. "The physician-patient relationship as a game of strategic information transmission," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 651-668.
    8. Hirshleifer, Jack, 1973. "Where Are We in the Theory of Information?," American Economic Review, American Economic Association, vol. 63(2), pages 31-39, May.
    9. Devlin, Rose Anne & Sarma, Sisira, 2008. "Do physician remuneration schemes matter? The case of Canadian family physicians," Journal of Health Economics, Elsevier, vol. 27(5), pages 1168-1181, September.
    10. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 281-298, April.
    11. Edward E. Schlee, 2001. "The Value of Information in Efficient Risk-Sharing Arrangements," American Economic Review, American Economic Association, vol. 91(3), pages 509-524, June.
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    Keywords

    physician-patient relationship; value of private information;

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