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Imperfect quality information in a quality-competitive hospital market

  • Hugh Gravelle
  • Peter Sivey

We examine the implications of policies to improve information about the qualities of profit seeking duopoly hospitals which face the same regulated price and compete on quality. We show that if the hospital costs of quality are similar then better information increases the quality of both hospitals. However if the costs are sufficiently different improved information will reduce the quality of both hospitals.

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File URL: http://www.york.ac.uk/media/economics/documents/discussionpapers/2009/0909.pdf
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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 09/09.

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Handle: RePEc:yor:yorken:09/09
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  1. David M. Cutler & Robert S. Ilckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
  2. Marcello Montefiori, 2005. "Spatial competition for quality in the market for hospital care," The European Journal of Health Economics, Springer, vol. 6(2), pages 131-135, June.
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