What Does Willingness-to-Pay Reveal About Hospital Market Power in Merger Cases?

2007 ◽  
Author(s):  
Gary M. Fournier ◽  
Yunwei Gai
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Hospital Market

Countervailing Market Power and Hospital Competition

2021 ◽  
pp. 1-33
Author(s):  
Eric Barrette ◽  
Gautam Gowrisankaran ◽  
Robert Town
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Claims Data ◽  
Antitrust Policy ◽  
Healthcare Sector ◽  
Hospital Competition ◽  
Hospital Market ◽  
Economic Theories ◽  
Hospital Merger

While economic theories indicate that market power by downstream firms can potentially counteract market power upstream, antitrust policy is opaque about whether to incorporate countervailing market power in merger analyses. We use detailed national claims data from the healthcare sector to evaluate whether countervailing insurer power does indeed limit hospitals' exercise of market power. We estimate willingness-to-pay models to evaluate hospital market power across analysis areas. We find that countervailing market power is important: a typical hospital merger would raise hospital prices 4.3% at the 25th percentile of insurer concentration but only 0.97% at the 75th percentile of insurer concentration.

The Interplay Between Obfuscation and Prominence in Price Comparison Platforms

2020 ◽  
Vol 66 (10) ◽  
pp. 4843-4862 ◽  
Author(s):  
Samir Mamadehussene
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Price Comparison

This paper analyzes price comparison platforms’ equilibrium design of their search environments, namely the order under which firms are displayed (having a prominent firm or listing firms randomly) and how much price complexity firms are able to use. It is found that (1) the possibility to obfuscate amplifies firms’ willingness to pay for the prominent position; (2) when platforms sell prominence, they optimally allow for more obfuscation than they would if they were to display firms randomly; and (3) if platforms are sufficiently differentiated, they find it optimal to sell prominence. Thus, platforms exploit their market power over consumers by implementing a prominent position and allowing for large levels of obfuscation. This paper also finds that in equilibrium, there is tension between platforms and firms regarding how much price complexity is used: firms would like to use even more obfuscation than what the platform allows, so the platform must monitor firms’ prices to make sure that they are not excessively complex. This paper was accepted by Juanjuan Zhang, marketing.

scholarly journals Toll Competition Among Congested Roads

2004 ◽  
Vol 4 (1) ◽  
Author(s):  
Eduardo M Engel ◽  
Ronald Fischer ◽  
Alexander Galetovic
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Optimal Level ◽  
Market Size ◽  
Private Firms

Abstract Roads are being franchised to private firms in many countries, raising the issue of regulating the tolls they charge. When there is more than one road to get from one point to another, regulation need not be necessary, since competition may substitute for toll regulation. This paper studies toll competition among private asymmetric roads subject to congestion. We obtain two main results. First, in equilibrium tolls are higher than optimal, that is, there is too little congestion. This happens because road owners internalize the reduction in drivers’ willingness to pay due to congestion, thereby softening competition. It follows that the drawback of private competition is exercise of market power, not excessive congestion as is sometimes conjectured. Second, the distortion becomes smaller as market size and the number of roads grow, even if the density of drivers does not change. In the limit tolls converge to the socially optimal level and are just enough to make each driver internalize the congestion externality. This suggests that the scope for competition is better in larger networks.

scholarly journals Does Health Plan Generosity Enhance Hospital Market Power?

2015 ◽  
Author(s):  
Laurence Baker ◽  
M. Kate Bundorf ◽  
Daniel Kessler
Keyword(s):  
Market Power ◽  
Health Plan ◽  
Hospital Market

scholarly journals Does health plan generosity enhance hospital market power?

2015 ◽  
Vol 44 ◽  
pp. 54-62 ◽  
Author(s):  
Laurence C. Baker ◽  
M. Kate Bundorf ◽  
Daniel P. Kessler
Keyword(s):  
Market Power ◽  
Health Plan ◽  
Hospital Market

Subjective Time Preference and Willingness to Pay for an Energy-Saving Durable Good

2001 ◽  
Vol 32 (3) ◽  
pp. 133-141 ◽  
Author(s):  
Gerrit Antonides ◽  
Sophia R. Wunderink
Keyword(s):  
Willingness To Pay ◽  
Energy Saving ◽  
Subjective Time ◽  
Durable Good ◽  
Discount Function ◽  
Hyperbolic Discount ◽  
The One ◽  
Two Parameter ◽  
Difference Effect ◽  
Better Than

Summary: Different shapes of individual subjective discount functions were compared using real measures of willingness to accept future monetary outcomes in an experiment. The two-parameter hyperbolic discount function described the data better than three alternative one-parameter discount functions. However, the hyperbolic discount functions did not explain the common difference effect better than the classical discount function. Discount functions were also estimated from survey data of Dutch households who reported their willingness to postpone positive and negative amounts. Future positive amounts were discounted more than future negative amounts and smaller amounts were discounted more than larger amounts. Furthermore, younger people discounted more than older people. Finally, discount functions were used in explaining consumers' willingness to pay for an energy-saving durable good. In this case, the two-parameter discount model could not be estimated and the one-parameter models did not differ significantly in explaining the data.

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