Competition and consumer choice in option demand markets

Gilad Sorek

Economics Letters, 2016, vol. 146, issue C, 13-16

Abstract: Two medical providers choose their geographic location and medical-care specialization, and then compete in prices under health insurance sales. When buying insurance consumers know their geographic address, but they do not know their preferred medical treatment before getting sick. Hence, consumers may desire buying access-options for both providers, although eventually attending only one. I show that location and product choices in such option demand markets greatly differ from those obtained for corresponding spot markets and may yields efficient, excessive, or insufficient level of consumer choice in terms of product differentiation and geographic dispersion.

Keywords: Consumer choice; Option demand; Medical care; Spatial competition (search for similar items in EconPapers)
JEL-codes: I11 I13 L13 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176516302531
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Competition and Consume Choice in Option Demand Markets (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:146:y:2016:i:c:p:13-16

DOI: 10.1016/j.econlet.2016.07.013

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().