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Vertical product differentiation and social health systems in a market for prescription drugs: Revised version of a talk given at the 2. World Congress on Health Economics in Zürich, Sept. 10 - 14, 1990

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  • Boom, Anette

Abstract

Following models of vertically differentiated duopoly this paper deals with the influence of a social health system on the sustainability of the duopoly and on the respective prices. Emphasis is laid on the effect of a reduction of the coinsurance rate for drugs on prices and on the market structure. The results depend on the size of the relative effect such a reduction has on the rate of the disposable income. The social health system is assumed to be financed by deductions from the income of the insured. Conclusions are drawn with respect to different health systems.

Suggested Citation

  • Boom, Anette, 1990. "Vertical product differentiation and social health systems in a market for prescription drugs: Revised version of a talk given at the 2. World Congress on Health Economics in Zürich, Sept. 10 - 14, 19," Discussion Papers, Series I 250, University of Konstanz, Department of Economics.
    • Handle: RePEc:zbw:kondp1:250
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    References listed on IDEAS

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    1. Gabszewicz, Jean Jaskold & Thisse, Jacques-Francois, 1982. "Product Differentiation with Income Disparities: An Illustrative Model," Journal of Industrial Economics, Wiley Blackwell, vol. 31(1-2), pages 115-129, September.
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    5. Waterson, Michael, 1987. "Recent Developments in the Theory of Natural Monopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 1(1), pages 59-80.
    6. Sutton, John, 1986. "Vertical Product Differentiation: Some Basic Themes," American Economic Review, American Economic Association, vol. 76(2), pages 393-398, May.
    7. Shaked, Avner & Sutton, John, 1987. "Product Differentiation and Industrial Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 131-146, December.
    8. Jaskold Gabszewicz, J. & Thisse, J. -F., 1980. "Entry (and exit) in a differentiated industry," Journal of Economic Theory, Elsevier, vol. 22(2), pages 327-338, April.
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