Melbourne Institute Working Paper Series Database (1984 - 2010)

Melbourne Institute Working Paper No. 05/2009

Imperfect Quality Information in a Quality-Competitive Hospital Market

by

Hugh Gravelle and Peter Sivey

Date: March 2009

Abstract: 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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