Becoming a bad doctor

Nora Szech

Journal of Economic Behavior & Organization, 2011, vol. 80, issue 1, 244-257

Abstract: We analyze a market with n rational firms (doctors) and a continuum of boundedly rational consumers (patients). Following Spiegler (2006a), we assume that patients are not familiar with the market and rely on anecdotes. We analyze the price setting game played by doctors with given, different healing qualities. Doctors know their own quality, as well as the qualities of their competitors. In the unique equilibrium all doctors, no matter how bad, earn positive profits.

Keywords: Bounded rationality; S(1) procedure; Product differentiation; Price dispersion (search for similar items in EconPapers)
JEL-codes: D03 L13 L15 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:80:y:2011:i:1:p:244-257

DOI: 10.1016/j.jebo.2011.03.010

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