Altruism Heterogeneity and Quality Competition Among Healthcare Providers
31 Pages Posted: 8 Feb 2015
Date Written: October 6, 2014
New empirical evidence shows substantial heterogeneity in the altruism of healthcare providers. Spurred by this evidence, we build a spatial quality competition model with altruism heterogeneity. We find that more altruistic healthcare providers supply relatively higher quality levels and position themselves closer to the center. Whether the social planner prefers more or less horizontal differentiation is in general ambiguous and depends on the level of altruism. The more altruistic healthcare providers are, the more likely it is that the social planner prefers greater horizontal differentiation to off set costly quality competition.
Keywords: healthcare provider altruism and heterogeneity; quality competition
JEL Classification: H42, I11, I18, L13
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