Purchasing medical devices: The role of buyer competence and discretion.

This paper investigates the price variability of standardized medical devices purchased by Italian Public Buyers (PBs). A semiparametric approach is used to recover the marginal cost of each device. Average prices vary substantially between PBs; we show that most of the difference between the purchase prices and estimated costs is associated with a PB fixed effect, which, in turn, is related to the institutional characteristics and size of the PB.