Countervailing Market Power and Consumer Surplus: An Empirical Examination

Jorge Alé-Chilet and Juan Pablo Atal

AEA Papers and Proceedings, 2020, vol. 110, 579-83

Abstract: A current debate in antitrusts analyzes whether to allow horizontal agreements that counteract large imbalances of power in vertical negotiations. We leverage detailed data to empirically assess the consequences for patients of a recent case in which a group of physicians in Chile formed a trade association to improve their bargaining position with insurers. As a result of this agreement, out-of-pocket costs increased by 160 percent. Overall, we find large decreases in consumer surplus.

JEL-codes: G22 I11 I13 K21 L13 O16 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1257/pandp.20201012

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