Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/23752

TitleHospital mergers : a spatial competition approach
Author(s)Brekke, Kurt R.
Siciliani, Luigi
Straume, Odd Rune
KeywordsHospital mergers
Antitrust
Spatial competition
Issue date2013
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Abstract(s)Using a spatial competition framework with three ex ante identical hospitals, we study the effects of a hospital merger on quality, price and welfare. The merging hospitals always reduce quality, but the non-merging hospital responds by reducing quality if prices are fixed and increasing quality if not. The merging hospitals increase prices if demand responsiveness to quality is sufficiently low, whereas the non-merging hospital always increases its price. If prices are endogenous, a merger leads to higher average prices and quality in the market. A merger is harmful for total patient utility but can improve social welfare under price competition.
TypeWorking paper
URIhttp://hdl.handle.net/1822/23752
Publisher versionhttp://www3.eeg.uminho.pt/economia/nipe/docs/2013/NIPE_WP_04_2013.pdf
Peer-Reviewedyes
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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