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Journal article
Regulation and Capacity Competition in Health Care: Evidence from U.S. Dialysis Markets
The review of economics and statistics, v 97(5), pp 965-982
01 Dec 2015
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
This paper studies entry and capacity decisions by dialysis providers in the United States. We estimate a structural model where providers make continuous strategic choices of capacity based on their private information about own costs and knowledge of the distribution of competitors’ private information. We evaluate the impact on the market structure and providers’ profits under counterfactual regulatory policies that increase the costs or reduce the payment per unit of capacity. We find that these policies reduce the market capacity as measured by the number of dialysis stations. However, the downward-sloping reaction curve shields some providers from negative profit shocks in certain markets. The paper also has a methodological contribution in that it proposes new estimators for Bayesian games with continuous actions.
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Details
- Title
- Regulation and Capacity Competition in Health Care: Evidence from U.S. Dialysis Markets
- Creators
- Mian Dai - Drexel UniversityXun Tang - Rice University
- Publication Details
- The review of economics and statistics, v 97(5), pp 965-982
- Publisher
- The MIT Press
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000366302000004
- Scopus ID
- 2-s2.0-84949785530
- Other Identifier
- 991019168291104721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics
- Social Sciences, Mathematical Methods