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Hen 368 lecture 10 markets
This document summarizes key concepts in health economics related to physician markets. It discusses different market structures including perfect competition, monopolistic competition, oligopoly, and monopoly. It also covers barriers to entry in the physician market such as education, residency, and licensing requirements. Finally, it discusses issues like asymmetric information, supplier-induced demand, malpractice insurance, and debates around the roles of market incentives versus government incentives in regulating physician quality and costs.
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Hen 368 lecture 10 markets
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- 2. Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Firms ManyMany Few One Type of Product Identical Different Similar Unique Ease of Entry Easy Easy Substantial Blocked Demand D = MR Dynamic Game Theory D > MR Examples Commodities Rice Apples Cell Phones Utilities Government Market Structure and Power 0% 100%
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- 4. Prisoner's Dilemma Pursuing theDominant Strategy Results in Non-Cooperation and Leaves Everyone Worse Off
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- 6. John Nash (1928 -) Game Theory Nash Equilibrium Nobel 1994 A Beautiful Mind
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- 8. 50 SR 100 SR Verizon 1,000 100SR AT&T 1,000 50 SR Verizon 500 Verizon 2,000 Verizon 700 AT&T 2,000 AT&T 500 AT&T 700 1. Reduce Price 2. Sell more 3. Increase profit
- 9. Physician Market Asymmetric Information JustifiesGovernment Intervention Protect the Public
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- 11. Quantity Price Physician Market Demand Supply Q2 P2 Q1 P1 1. Reduce Supply 2.Increase Price 3. Reduce Quantity
- 12. Can the Marketdo a better job of weeding-out incompetent physicians than the Government? Incentives Bureaucrats vs. Entrepreneurs Who decides?
- 13. Market Incentives Medical Liability For-ProfitProviders Brand Names Employed Physicians
- 14. Government Incentives Bad rewardfor bad physicians No rewards for good physicians Bribes Cannot be held liable - sued Unseen
- 15. Optimal Practice Size Economiesof scale 3 - 7 physicians
- 16. Supplier-Induced Demand Demand Supply Q2 P2 Q1 P1 1. IncreaseDemand 2. Increase Price 3. Increase Quantity
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