Hen 368 lecture 10 markets
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
166
On Slideshare
166
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Health EconomicsLecture 10Physician, Hospital, andPharmaceutical Markets
  • 2. PerfectCompetitionMonopolisticCompetitionOligopoly MonopolyNumber ofFirmsMany Many Few OneType of Product Identical Different Similar UniqueEase of Entry Easy Easy Substantial BlockedDemand D = MR DynamicGameTheoryD > MRExamplesCommoditiesRiceApplesCell Phones UtilitiesGovernmentMarket Structure and Power0% 100%
  • 3. EddieWillieBetraysWillie1YearSilentSilentBetraysEddie1YearEddieGoes FreeWillie10YearsWillieGoes FreeEddie10YearsWillie5YearsEddie5YearsPrisonersDilemma
  • 4. Prisoners DilemmaPursuing the Dominant StrategyResults in Non-Cooperationand Leaves EveryoneWorse Off
  • 5. Game TheoryRulesStrategiesPayoffs
  • 6. John Nash(1928 - )Game TheoryNash EquilibriumNobel 1994A Beautiful Mind
  • 7. DuoployTwo Sellers
  • 8. 50 SR100 SRVerizon1,000100 SRAT&T1,00050 SRVerizon500Verizon2,000Verizon700AT&T2,000AT&T500AT&T7001. Reduce Price2. Sell more3. Increase profit
  • 9. Physician MarketAsymmetric InformationJustifies GovernmentInterventionProtect the Public
  • 10. Barriers to EntryEducationResidencyLicensing
  • 11. QuantityPricePhysician MarketDemandSupplyQ2P2Q1P11. ReduceSupply2. IncreasePrice3. ReduceQuantity
  • 12. Can the Market do a better jobof weeding-out incompetentphysicians than theGovernment?IncentivesBureaucrats vs. EntrepreneursWho decides?
  • 13. Market IncentivesMedical LiabilityFor-Profit ProvidersBrand NamesEmployed Physicians
  • 14. Government IncentivesBad reward for bad physiciansNo rewards for good physiciansBribesCannot be held liable - suedUnseen
  • 15. Optimal Practice SizeEconomies of scale3 - 7 physicians
  • 16. Supplier-Induced DemandDemandSupplyQ2P2Q1P11. Increase Demand 2. Increase Price 3. Increase Quantity
  • 17. Malpractice InsuranceCompensateVictimsDeter MalpracticeDefensive Medicine