Bisceglia, Michele, Padilla, A. Jorge
, Piccolo, Salvatore
and Saaskilahti, Pekka
(2023)
On the bright side of market concentration in a mixed-oligopoly healthcare industry.
Journal of Health Economics, vol.90 (102771).
Abstract
We describe the healthcare industry as a mixed oligopoly, where a public and two private providers compete, and examine the effects of a merger between the two private healthcare providers on prices, quality, and welfare. When the price and (eventually) quality of the public provider are regulated, the cost synergies required for the merger to increase consumer welfare are less significant than in a setting with only profit-maximizing providers. When, instead, the public provider can adjust its policy to the rivals’ behavior and maximizes a weighted sum of profits and consumer surplus (i.e., it has ‘semi-altruistic’ preferences), the merger is consumer surplus increasing if the public provider is sufficiently altruist, in some cases even absent efficiencies. These results suggest that ignoring the role and objectives of the public sector in the healthcare industry may lead agencies to reject mergers that, while would decrease consumer welfare in fully privatized industries, would increase it in mixed oligopolies.
Item Type: | Article |
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Language: | English |
Date: | July 2023 |
Refereed: | Yes |
Place of Publication: | Amsterdam |
Uncontrolled Keywords: | Antitrust, Healthcare industry, Quality, Mergers, Mixed oligopoly, Regulation |
JEL Classification: | I11 - Analysis of Health Care Markets I18 - Government Policy; Regulation; Public Health L13 - Oligopoly and Other Imperfect Markets L44 - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 03 Feb 2025 10:23 |
Last Modified: | 07 Feb 2025 10:48 |
OAI Identifier: | oai:tse-fr.eu:130281 |
URI: | https://publications.ut-capitole.fr/id/eprint/50354 |