quality competition with motivated providers and sluggish demand we study incentives for quality provision in markets where providers are motivated semi altruistic prices are regulated and firms are funded by a combination of block grants and unit prices competition is based on quality and demand adjusts sluggishly health or education are sectors in which the mentioned features are the rule we show that the presence of motivated providers makes dynamic competition tougher resulting in higher steady state levels of quality in the closed loop solution than in the benchmark open loop solution if the price is sufficiently high however this result is reversed if the price is sufficiently low and below unit costs sufficiently low prices also imply that a reduction in demand sluggishness will lead to lower steady state quality prices below unit costs will nevertheless be welfare optimal if the providers are sufficiently motivated

the drivers of international migration to the uk a panel based bayesian model averaging approach a heterogeneous panel based bayesian model averaging approach is used to identify the robust economic and policy drivers of international migration to the uk from 14 different source regions over 1980 2007 around three quarters of the increase in net immigration over the last decade which is particularly pronounced for selected source regions is associated with structural change which may be attributed to uk and foreign immigration policy the remainder of the rise is largely explained by friends and family effects there are considerable uncertainties associated both with the effects of particular economic drivers of immigration and with forecasts of immigration

what type of finance matters for growth bayesian model averaging evidence this paper examines the effect of finance on long term economic growth using bayesian model averaging to address model uncertainty in cross country growth regressions the literature largely focuses on financial indicators that assess the financial depth of banks and stock markets these indicators are examined jointly with newly developed indicators that assess the stability and efficiency of financial markets once the finance growth regressions are subjected to model uncertainty the results suggest that commonly used indicators of financial development are not robustly related to long term growth however the findings from the global sample indicate that one newly developed indicator the efficiency of financial intermediaries is robustly related to long term growth

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

hospital competition with soft budgets we study the incentives for hospitals to provide quality and expend cost reducing effort when their budgets are soft i e the payer may cover deficits or confiscate surpluses the basic set up is a hotelling model with two hospitals that differ in location and face demand uncertainty where the hospitals run deficits surpluses in the high low demand state softer budgets reduce cost efficiency while the effect on quality is ambiguous for given cost efficiency softer budgets increase quality since parts of the expenditures may be covered by the payer however softer budgets reduce cost reducing effort and the profit margin which in turn weakens quality incentives we also find that profit confiscation reduces quality and cost reducing effort first best is achieved by a strict no bailout and no profit confiscation policy when the regulated price is optimally set however for suboptimal prices a more lenient bailout policy can be welfare improving

are any growth theories robust this article investigates the strength of empirical evidence for various growth theories when there is model uncertainty with respect to the correct growth model using model averaging methods we find little evidence that so called fundamental growth theories play an important role in explaining aggregate growth in contrast we find strong evidence for macroeconomic policy effects and a role for unexplained regional heterogeneity as well as some evidence of parameter heterogeneity in the aggregate production function we conclude that the ability of cross country growth regressions to adjudicate the relative importance of alternative growth theories is limited despite the vast amount of empirical research generated by new growth theories there is remarkably little consensus on which mechanisms are most salient in explaining cross country differences this article is designed to provide some evidence on this question by examining the robustness of empirical support for different growth the ories as determinants of both aggregate growth and its underlying components total factor productivity tfp growth and physical and human capital accumulation one reason for the lack of empirical consensus on growth determinants is that the main statistical tool in empirical studies cross country growth regressions provides very different answers depending on how the regression is specified which for this context typically amounts to the choice of control variables individual papers typically employ regressions that include modest subsets of the body of regressors that have been pro posed in the literature as a whole others employ a kitchen sink approach to evaluate the relative evidentiary support of competing growth theories in such an exercise a large number of variables are included in a regression and those variables that prove to be significant are then declared to be the important determinants of growth while the others are dismissed as unimportant rodrik et al 2002 sachs 2003

monopolistic competition with experience goods this paper constructs a model of monopolistic competition where consumers cannot directly verify product quality prior to an initial purchase instead consumers base initial purchases on observed prices which perfectly signal firms qualities both in and out of equilibrium equilibrium quality is less than efficient but generally bounded away from the minimum quality with free entry observable product variety exceeds what would prevail with perfect information as repeat purchases become large relative to initial purchases or as firms become small relative to the size of the market equilibrium product quality rises and the market converges to the full information equilibrium

patients trust and the quality of physicians patients are uncertain of physicians quality but learn about the quality of particular physicians through experience in treatment patients come to trust physicians who have served them well this paper explores the economic consequences of patients learning and trust within a model of the market for physicians services in a market equilibrium there are too many incompetent physicians in practice surprisingly even the more competent physicians have an interest in preventing patients from judging quality except through experience as we show all physicians including the most competent may oppose steps to inform patients of physicians quality

quality competition with profit constraints abstract firms in markets such as health care and education are often profit constrained due to regulation or their non profit status and they are often viewed as being altruistic towards consumers we use a spatial competition framework to study incentives for cost containment and quality provision by altruistic firms facing profit constraints if prices are regulated profit constraints lead to lower cost containment efforts but higher quality if and only if firms are sufficiently altruistic under price competition profit constraints reduce quality and cost containment efforts but lead to lower prices if and only if firms are sufficiently altruistic profit constrained firms cost containment efforts are below the first best while their quality might be too high or too low if prices are regulated profit constraints can improve welfare and be a complement or substitute to a higher regulated price depending on the degree of altruism

identification of supplier induced demand in the health care sector this paper explores the issues and pitfalls encountered when attempting to test empirically the hypothesis that physician hospital or any other input supply level induces increasing demand for health services in the strict sense of demand shift and through that increased demand for the input in question evidence is presented which suggests that an empirical test of the supplier induced demand sid hypothesis of the type traditionally performed may not in fact be feasible with cross sectional aggregate data such as is usually used

the effect of entry regulation in the health care sector the case of home health the consequences of government regulation in the post acute care sector are not well understood we examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries about 4 5 million and subsequent home health admissions to determine whether there is a significant difference in home health utilization hospital readmission rates and health care expenditures in states with and without certificate of need laws con regulating entry we identify these effects by looking across regulated and nonregulated states within hospital referral regions which characterize well defined health care markets and frequently cross state boundaries we find that con states use home health less frequently but system wide rehospitalization rates overall medicare expenditures and home health practice patterns are similar removing con for home health would have negligible system wide effects on health care costs and quality

quality incentives in a regulated market with imperfect information and switching costs capitation in general practice we model a system akin to the british national health service nhs in which general practictioners gps are paid by capitation from general taxation gps are horizontally and vertically differentiated and compete for patients via their imperfect observed quality we show that for any given capitation fee quality is lower and the incentive effects of the fee on quality are smaller when there is imperfect information there are diminishing welfare gains from improving patient information but increasing welfare gains from reducing switching costs gps do not act efficiently to improve patient information via advertising or to reduce the costs of switching

advertising media strategies in the film industry the primary aim of this article is to estimate the multiple determinants of film advertising expenditures in four important media namely television press outdoor and radio in the uk first television advertising the leading film advertising medium is examined as part of a system of equations capturing the interdependences between advertising the number of screens on which films are initially shown and box office revenues then a reduced form model is put forward to reveal the determinants of film advertising in the four media while major distribution companies have different preferences for the use of the alternative advertising media results highlight the importance of quality signals such as critical reviews in determining advertising expenditures in the film industry moreover advertising expenditures can themselves be considered to offer potential cinema goers signals of film quality

a theory of physician behavior with supplier induced demand the health care crisis of the 1960 s and 1970 s fueled unprecedented efforts by the congress to control costs and at the same time improve access to care as a basis for policy the economics literature offers confusing direction consisting of alternative theories of demand 9 13 theories of market structure 12 5 11 10 and theories of physician behavior and supply response 4 1 at the most fundamental levels of controversy economists have not resolved the issues of demand creation satisficing behavior and targeted income in the modelling of the physician firm the notion that health care markets may be dominated by the health care provider s ability to create demand was introduced formally in newhouse 12 evans parish and sully 4 green 8 and fuchs 6 all offer further refinement of the supplier induced model however as yet no formal presentation of such a theory exists to a large extent an analytical framework that incorporates the physician s decision making processes is absent and remains implicit in the empirical results found in the literature this paper presents a theoretical framework for a supplier induced model of physician behavior whereby we may compare and contrast its implications with those of the standard neoclassical model 1 the acknowledged strength of the supplier induced theory is its ability to explain empirical evidence which stands at odds with more traditional approaches in particular a number of studies have reported a direct association between physician density and physicians fees 12 7 2 that is as the stock of physicians increases the price of medi

rough and lonely road to prosperity a reexamination of the sources of growth in africa using bayesian model averaging this paper takes a fresh look at africa s growth experience by using the bayesian model averaging bma methodology bma enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain africa s growth experience posterior coefficient estimates reveal that key engines of growth in africa are substantially different from those in the rest of the world more precisely it is shown that mining primary exports and initial primary education exerted differential effect on african growth these results are examined in relation to the existing literature copyright 2008 john wiley sons ltd

globalisation and corruption revisited this paper presents new empirical evidence on the determinants of corruption focussing on the role of globalization and inequality the estimates for a panel of 102 countries over the period 1995 2005 point to three main results i detection technologies reflected in a high level of development human capital and political rights reduce corruption whereas natural resource rents increase corruption ii globalization in terms of both trade and financial openness has a negative eect on corruption which is more pronounced in developing countries iii inequality increases corruption and once the role of inequality is accounted for the impact of globalization on corruption is halved in line with recent theory this suggests that globalization besides reducing corruption through enhanced competition aects corruption also by reducing inequality

two part pricing for experience goods in the presence of adverse selection abstract because customers learn something when they purchase an experience good for the first time a firm selling experience goods may face different demand curves from new and repeat customers the firm can exploit these differences by using a two part pricing strategy to price discriminate between new and repeat customers the firm may also use a two part pricing strategy to mitigate the information problems of adverse selection when its quality is uncertain the analysis is particularly applicable to service markets where customers and firms seek long term relationships and firms maintain customer records which facilitate price discrimination

trade creation and diversion revisited accounting for model uncertainty and natural trading partner effects summary the effect of preferential trade agreements ptas on trade flows is subject to model uncertainty stemming from the diverse and even contradictory effects suggested by the theoretical pta literature the existing empirical literature has produced remarkably disparate results and the wide variety of empirical approaches reflects the uncertainty about the correct set of explanatory variables that ought to be included in the analysis to account for the model uncertainty that surrounds the validity of the competing pta theories we introduce bayesian model averaging bma to the pta literature statistical theory shows that bma successfully incorporates model uncertainty in linear regression analysis by minimizing the mean squared error and by generating predictive distributions with optimal predictive performance once model uncertainty is addressed as part of the empirical strategy we find strong evidence of trade creation trade diversion and open bloc effects our results are robust to a range of alternative empirical specifications proposed by the recent pta literature copyright 2010 john wiley sons ltd

a new test for supplier inducement and application to the canadian market for dental care abstract the hypothesis that dentists do not induce demand for their services is tested using reduced form estimates of the price elasticity of demand if demand is autonomous shifts in supply for whatever reason should generate equivalent estimates provided access costs change proportionately with shifts in supply if demand inducement is present demand can appear to be very elastic or very inelastic depending on what is causing the shift in supply each of three applications of this test conducted in the context of jointly estimated fee and quantity equations using annual canadian data for 1956 1989 rejects the no inducement hypothesis

evolutionary efficacy of a pay for performance scheme with motivated agents the paper studies the short run and long run effects of the introduction of a team oriented pay for performance p4p payment scheme when agents may differ in their degree of intrinsic motivation toward the job suppose that new potential employees were able to assess the expected pay offs of current workers then they may modify their approach to work in order to follow the employee type that earned the highest expected pay off we show that the definition of the scheme needs to take into consideration the effects produced on the evolution of the motivation of new generations in particular the desirability and success of a p4p scheme strongly depend on the way incentives are allocated to the members of a team on the power of the quality related financial incentive and on the economic and social context in which the scheme is introduced the analysis is in part motivated by the introduction in uk in 2004 of a p4p scheme for family practitioners in the uk quality and outcomes framework qof and of a new system of assessing the quality of academic research completed in 2014 research excellence framework ref

on doctors mechanics and computer specialists the economics of credence goods most of us need the services of an expert when our apartment s heating or our washing machine breaks down or when our car starts to make strange noises and for most of us commissioning an expert to solve the problem causes concern this concern does not disappear even after repair and payment of the bill on the contrary one worries about paying for a service that was not provided or receiving some unnecessary treatment this article studies the economics underlying these worries under which conditions do experts have an incentive to exploit the informational problems associated with markets for diagnosis and treatment what types of fraud exist what are the methods and institutions for dealing with these informational problems under which conditions does the market provide incentives to deter fraudulent behavior and what happens if all or some of those conditions are violated

identification of physician induced demand whether market failure exists in the health care sector because physicians induce demand in their own self interest has not been clearly addressed because of identification problems a model is developed which includes the patient s financial burden as a limiting factor on demand inducement new data from a national survey are used to test the demand inducement hypothesis and identify physician initiated expenditures when individual health insurance and other factors are held constant additional corroboration of the physician induced demand hypothesis is found but the magnitude of the effect is very small and is statistically significant only for more discretionary expenditures

the influence of expert reviews on consumer demand for experience goods a case study of movie critics an inherent problem in measuring the influence of expert reviews on the demand for experience goods is that a correlation between good reviews and high demand may be spurious induced by an underlying correlation with unobservable quality signals using the timing of the reviews by two popular movie critics siskel and ebert relative to opening weekend box office revenue we apply a difference in differences approach to circumvent the problem of spurious correlation after purging the spurious correlation the measured influence effect is smaller though still detectable positive reviews have a particularly large influence on the demand for dramas and narrowly released movies

bertrand supertraps we study oligopoly price competition between multiproduct firms firms whose products interact in the profit function specifically we focus on the impact of intrafirm product interactions on the level of equilibrium profits this impact may be decomposed in two different ways a a direct effect keeping the competitors actions fixed plus a strategic effect i e through the competitors actions or alternatively b a competitive advantage effect change in firmi only plus an imitation effect change in all other firms we derive conditions such that a the strategic effect more than outweighs the direct effect and conditions such that b the imitation effect more than outweighs the competitive advantage effect bertrand supertraps for example an increase in the degree of economies of scope would increase profits if prices were fixed or if the change were limited to firmi s cost function however if all firms increase the degree of economies of scope then all firms receive lower profits a variety of other applications is considered including learning curves core competencies demand synergies systems competition compatibility bundling network effects switching costs durable goods long term contracts

a further analysis of the physician inducement controversy this article extends several recent contributions that have compared the physician induced demand hypothesis to the theory of a monopoly where advertising is included as a decision variable by introducing a standard profit maximizing model with inducement it derives the conditions for the optimum level of inducement to show that the controversy over inducement is directly related to the elasticity of demand for the physician s services in particular inducement is likely to be prevalent only where the individual physician has a high degree of monopoly power as measured by its elasticity of demand it will disappear entirely as competitive conditions are approached furthermore the article argues that a physician s level of induced output is likely to diminish and not increase as others have suggested following increases in physician supply

comments on jointness of growth determinants we consider the measures of jointness proposed by doppelhofer and weeks 2009 and strachan 2009 in the context of variable selection using the general criteria suggested in ley and steel 2007 we identify some shortcomings of these measures which are illustrated with empirically relevant example cases we argue that careful examination of the properties of any jointness measure is critical before using it to inform decisions and favour the use of the measures proposed in ley and steel 2007 copyright c 2009 john wiley sons ltd

a clarification of theories and evidence on supplier induced demand for physicians services this article both simplifies and extends the literature on physician induced demand it shows that inducement should be expected in all imperfectly competitive markets that are also characterized by incomplete agency relationships more important it argues that confusion over the extent of the inducement phenomenon has been created by several contributions that fail to distinguish between the effects of changes in physician population ratios on changes in the individual physician s output and the effects on per capita utilization in particular it demonstrates that by confounding units of analysis the major empirical results found in recent articles by rossiter and wilensky are contradicted by their model their evidence however together with findings from other studies are reinterpreted to suggest that physicians are even more constrained than is generally believed in being able to induce increases in demand

comment on jointness of growth determinants by gernot doppelhofer and melvyn weeks doppelhofer and weeks 2009 present a statistic designed to indicate the probability that pairs of regressors appear together or individually in a bayesian model averaged linear regression this comment presents an alternative measure that is designed to overcome some of the limitations of doppelhofer and weeks statistic copyright 2009 john wiley sons ltd

growth econometrics for agnostics and true believers abstract the issue of model uncertainty is central to the empirical study of economic growth many recent papers use bayesian model averaging to address model uncertainty but ciccone and jarocinski 2010 have questioned the approach on theoretical and empirical grounds they argue that a standard agnostic approach is too sensitive to small changes in the dependent variable such as those associated with different vintages of the penn world table pwt this paper revisits their theoretical arguments and empirical illustration drawing on more recent vintages of the pwt and introducing an approach that limits the degree of agnosticism

optimal dynamic volume based price regulation abstract we consider a model of optimal price regulation in markets where demand is sluggish and asymmetric providers compete on quality using a spatial model which is suitable to investigate the health care and education sector we analyse within a dynamic set up the scope for price premiums or penalties on volume under the assumption of symmetric cost information we show that the socially optimal time path of quality provision off the steady state can be replicated by a simple dynamic pricing rule where the dynamic part of the rule is ex ante non discriminatory in the sense that the price premium or penalty on volume is common across providers despite their differing production costs whether the price schedule involves a penalty or a premium on volume relates to two concerns regarding production costs and consumer benefits which go in opposite directions price adjustments over time occur only through the price penalty or premium not time directly which highlights the simplicity and thus applicability of this regulation scheme

prices as signals of product quality this paper is concerned with the provision of quality in markets in which consumers have only imperfect information the analysis focuses on a market for a product that can be produced at different quality levels all consumers prefer higher to lower quality but they may differ in their willingness to pay for quality producers can produce any quality they like but higher qualities are more costly to produce the information in this market is imperfect in the sense that the exact quality chosen by a firm is known only to the firm itself some information about the quality of a firm s product will however reach its potential customers even if they do not make any special effort to acquire it within the framework suggested here two conclusions are drawn first prices may serve as signals which exactly differentiate the available quality levels that is there exists a fulfilledexpectations equilibrium at which each price signals a unique quality level second the pricesignals are not arbitrary each price signal exceeds the marginal cost of producing the quality it signals such a mark up depends on the nature of the product specific information received by consumers the poorer the information the higher the mark up

valuing new goods in a model with complementarity online newspapers many important economic questions hinge on the extent to which new goods either crowd out or complement consumption of existing products recent methods for studying new goods rule out complementarity by assumption so their applicability to these questions has been limited i develop a new model that relaxes this restriction and use it to study competition between print and online newspapers using new micro data from washington dc i estimate the relationship between the print and online papers in demand the welfare impact of the online paper s introduction and the expected impact of charging positive online prices

hospital competition and quality with regulated prices we analyse the effect of competition on quality in hospital markets with regulated prices considering the effect of both introducing competition monopoly versus competition and increasing competition through either lower transportation costs increased substitutability or a higher number of hospitals with semi altruistic providers and a fairly general cost structure we show that the relationship between competition and quality is generally ambiguous in contrast to the received body of theoretical literature this is consistent with and potentially explains the mixed empirical evidence

unveiling covariate inclusion structures in economic growth regressions using latent class analysis we propose the use of latent class analysis methods to analyze the covariate inclusion patterns across specifications resulting from bayesian model averaging exercises using dirichlet process clustering we are able to identify and describe dependency structures among variables in terms of inclusion in the specifications that compose the model space we apply the method to two datasets of potential determinants of economic growth clustering the posterior covariate inclusion structure of the model space formed by linear regression models reveals interesting patterns of complementarity and substitutability across economic growth determinants

forward shifting of the personal income tax by self employed canadian dentists in this paper two tests are conducted of the null hypothesis that self employed canadian dentists do not shift the burden of their personal income tax forward to their patients by charging higher real dental fees the first test using ordinary least squares estimation of a reduced form dental fee equation is based on an exogenous tax variable the second test uses two stage least squares estimation of a reduced form dental fee equation with an endogenous tax variable both tests reject the null hypothesis of no forward shifting and fail to reject the hypothesis that self employed canadian dentists shift forward 100 percent of their personal income tax burden

marital division of labor with risk of divorce the role of voice enforcement of contracts it is assumed that emotional ties can be relied on to enforce implicit marital contracts by voice therefore in the present model divorce has economic consequences not only because the economies of scale from living together are destroyed but also because the scope for such voice enforcement is weakened moreover perhaps surprisingly i find that it is ambiguous how an increase in the probability of divorce influences predivorce allocation of time even when preferences are assumed to be homothetic

model averaging in economics an overview standard practice in empirical research is based on two steps first researchers select a model from the space of all possible models second they proceed as if the selected model had generated the data therefore uncertainty in the model selection step is typically ignored alternatively model averaging accounts for this model uncertainty in this paper i review the literature on model averaging with special emphasis on its applications to economics finally as an empirical illustration i consider model averaging to examine the deterrent effect of capital punishment across states in the usa

jointness of growth determinants reply to comments by rodney strachan eduardo ley and mark f j steel this comment contrasts the jointness statistics proposed by doppelhofer and weeks 2009 with alternatives proposed by strachan 2009 and ley and steel 2007 in contrast to the alternatives our jointness statistic constitutes a formal test for dependence over the joint posterior distribution the essential difference between our proposed measure and the alternatives is that our jointness measures uses the entire joint posterior distribution we discuss differences in jointness as well as inclusion and exclusion margins of the joint posterior distribution and the impact on economic significance using the numerical examples given by strachan 2009 and ley and steel 2009 copyright 2009 john wiley sons ltd

who wants a good reputation we examine a market in which long lived firms face a short term incentive to exert low effort but could earn higher profits if it were possible to commit to high effort there are two types of firms inept firms who can only exert low effort and competent firms who have a choice between high and low effort there is occasional exit and competent and inept potential entrants compete for the right to inherit the departing firm s reputation consumers receive noisy signals of effort choice and so competent firms choose high effort in an attempt to distinguish themselves from inept firms a competent firm is most likely to enter the market by purchasing an average reputation in the hopes of building it into a good reputation than either a very low reputation or a very high reputation inept firms in contrast find it more profitable to either buy high reputations and deplete them or buy low reputations

how different is africa a comment on masanjala and papageorgiou masanjala and papageorgiou rough and lonely road to prosperity a reexamination of the sources of growth in africa using bayesian model averaging journal of applied econometrics 2008 23 5 671 682 use bayesian model averaging to evaluate the existence of parameter heterogeneity between african and non african countries in the framework of cross country growth regressions we show that their results are not robust to the use of a prior over the model space that respects the strong heredity principle put forward by chipman for models including interaction terms

jointness of growth determinants this paper introduces a new measure of dependence or jointness among explanatory variables jointness is based on the joint posterior distribution of variables over the model space thereby taking model uncertainty into account by looking beyond marginal measures of variable importance jointness reveals generally unknown forms of dependence positive jointness implies that regressors are complements representing distinct but mutually reinforcing effects negative jointness implies that explanatory variables are substitutes and capture similar underlying effects in a cross country dataset we show that jointness among 67 determinants of growth is important affecting inference and informing economic policy copyright 2009 john wiley sons ltd

a blueprint for success in the us film industry this article analyses motion picture box office gross revenue using a cross section of films from 1997 to 2001 the dependent variable is total domestic box office revenue the independent variables investigated include production budget peak number of screens that the film was shown on in theaters consumer price index for movie tickets personal income season and year of the release in theaters a measure of pre existing audience aggregate critic rating mpaa rating genre word of mouth recommendation the presence of popular stars and the award nominations a distinction is made in the analysis between information available to the public prior to the release of the film in theaters ex ante and information available to the public after the film opens in theaters ex post results for the ex ante ordinary least squares ols regression reveal positive impacts of budget summer and holiday release dates critical reviews sequels and several genres on gross revenue significant positive determina

demand and supply dynamics for sequentially released products in international markets the case of motion pictures we develop an econometric model to study a setting in which a new product is launched first in its domestic market and only at a later stage in foreign markets and where the product s performance demand and availability supply are highly interdependent over time within and across markets integrating literature on international diffusion success breeds success trends and the theatrical motion picture industry the focus of the empirical analysis we develop a dynamic simultanenous equations model of the drivers and interrelationship of the behavior of consumers audiences and retailers exhibitors our findings emphasize the importance of considering the endogeneity and simultaneity of audience and exhibitor behavior and challenge conventional wisdom on the determinants of box office performance which is predominantly based on modeling frameworks that fail to account for the interdependence of performance and availability specifically we find that variables such as movie attributes and advertising expenditures which are usually assumed to influence audiences directly mostly influence revenuesindirectly namely through their impact on exhibitors screen allocations in addition consistent with the idea that the buzz for a movie is perishable we find that the longer is the time lag between releases the weaker is the relationship between domestic and foreign market performance an effect mostly driven by foreign exhibitors screen allocations

technological diffusion in primary health care the paper contains a theoretical and empirical analysis of the driving forces behind the diffusion of dry chemical laboratory equipment in norwegian primary health care the empirical analysis is embedded in a theoretical model of a dynamic investment problem focusing on heterogeneity in the potential adopters profit functions the empirical analysis indicates that most adopters are too late in adopting the new technology a logit analysis of the diffusion process lends some support to the notion that profit function heterogeneity influences the diffusion process an offspin of the empirical analysis is information on the reimbursement system indicating that this system does not promote efficient resource allocation in the sector

competition and equity in health care markets we provide a model where hospitals compete on quality under fixed prices to investigate how hospital competition affects i quality differences between hospitals and as a result ii health inequalities across hospitals and patient severities the answer to the first question is ambiguous and depends on factors related to both demand and supply of health care whether competition increases or reduces health inequalities depends on the type and measure of inequality health inequalities due to the postcode lottery are more likely to decrease if the marginal health gains from quality decrease at a higher rate whereas health inequalities between high and low severity patients decrease if patient composition effects are sufficiently small we also investigate the effect of competition on health inequalities as measured by the gini and the generalised gini coefficients and highlight differences compared to the simpler dispersion measures

two kinds of consumer switching costs in this article i introduce a distinction between two kinds of consumer switching costs transaction costs and learning costs while transaction costs are incurred by a consumer at every switch between suppliers learning costs are incurred only at a switch to a supplier that is new to him in a multiperiod duopoly model i examine the effects of changing the proportion of each kind of consumer switching costs while holding total switching costs constant i show that an increase in transaction costs relative to learning costs increases the price offered to loyal consumers this then has the further effect of decreasing the introductory price in the market it also leads to a decrease in welfare

product differentiation with imperfect information the paper employs a model of monopolistic competition and product differentiation with consumers who are not well informed about the specification of the offered brands welfare analysis of the degree of product differentiation in such a market concludes that the socially desirable product variety is limited due to consumers imperfect information consequently when the number of consumers is sufficiently large or economies to scale in production are sufficiently weak the market would offer excessive variety the literature on product differentiation is motivated by the observation that only some of the potential brands of a differentiated product are produced and sold it studies issues such as the role of the market structure in the determination of product diversity and the welfare performance of alternative markets in making this product selection for example see lancaster 1979 and salop 1979 in the spatial models tradition spence 1976 and dixit and stiglitz 1977 in the diversifying representative consumer tradition these studies model product selection as an equilibrium outcome of monopolistic competition the welfare analysis focuses on the tradeoff between consumer benefits which naturally increase with variety and production efficiency which owing to economies to scale decreases with variety they find no natural relation between the socially optimal variety and the market outcome the latter can be smaller or larger than the former depending on the parameters of the model although it is natural to expect that in some markets for differentiated products consumers are imperfectly informed about the available brands all these studies assume that consumers possess perfect information the present paper assumes that consumers are imperfectly informed and indeed obtains qualitatively different results first regardless of how significant are the production economies of scale the optimal variety is below a predetermined level that depends on the parameters of consumer utility and information second when consumer population is sufficiently large or economies to scale in production are sufficiently weak the market would offer excessive variety the explanation is that consumers imperfect information limits the extent to which they can exploit the variety offered in the market it is therefore a social waste to increase variety to a level that consumers cannot benefit from

competition and quality in health care markets a differential game approach we investigate the effect of competition on quality in health care markets with regulated prices taking a differential game approach in which quality is a stock variable using a hotelling framework we derive the open loop solution health care providers set the optimal investment plan at the initial period and the feedback closed loop solution providers move investments in response to the dynamics of the states under the closed loop solution competition is more intense in the sense that providers observe quality in each period and base their investment on this information if the marginal provision cost is constant the open loop and closed loop solutions coincide and the results are similar to the ones obtained by static models if the marginal provision cost is increasing investment and quality are lower in the closed loop solution when competition is more intense in this case static models tend to exaggerate the positive effect of competition on quality

quality incentives for gps in a regulated market abstract this paper analyses whether gps in a capitation system have incentives to provide quality even though health is a credence good a model is developed where the quality of the service varies due to inherent differences between the gps and rational patients make choices based on the outcome of treamtent we find that it is difficult to provide appropriate incentives since the search activity of patients offsets direct effects of a change in reimbursement variation in the inherent ability of the gps is good since it increases the search activity of the patients and the optimal reimbursement scheme is inversely proportional to the dispersion in types finally we find that offering a menu of contracts can potentially increase social welfare above the level of a simple capitation regime but it tends to lead to a higher variation in quality levels

true monopolistic competition as a result of imperfect information the paper restates hart s 1985a 1985b definition of large group monopolistic competition distinguishes it from oligopolistic competition and raises the question of whether there are reasonable circumstances that give rise to true monopolistic competition as defined the purpose is to show that consumers imperfect information may create conditions that will turn an otherwise oligopolistic market into a truly monopolistically competitive one