AI Article Synopsis
- The study looks at how hospitals compete in providing quality care for patients while considering how decisions are made.
- They used a lab experiment where people decided on quality for three different hospitals, either alone or in teams.
- Results showed that hospitals tend to lower quality when they see competitors doing the same, and team decisions were less influenced by others, often leading to different quality choices.
Article Abstract
We investigate quality provision and the occurrence of strategic behaviour in competitive hospital markets where providers are assumed to be semi-altruistic towards patients. For this, we employ a laboratory experiment with a hospital market framing. Subjects decide on the quality levels for one of three competing hospitals respectively. We vary the organizational aspect of whether quality decisions within hospitals are made by individuals or teams. Realized monetary patient benefits go to real patients outside the lab. In both settings, we find that degrees of cooperation quickly converge towards negative values, implying absence of collusion and patient centred or competitive quality choices. Moreover, hospitals treat quality as a strategic complement and adjust their quality choice in the same direction as their competitors. The response magnitude for team markets is weaker; this is driven by non-cooperative or altruistic teams, which tend to set levels of quality that are strategically independent.
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|---|---|
| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC11445323 | PMC |
| http://dx.doi.org/10.1007/s10754-024-09366-3 | DOI Listing |
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