Price Discrimination for Physicians' Services

Robert T. Masson and S. Wu

Journal of Human Resources, 1974, vol. 9, issue 1, 63-79

Abstract: This paper develops an alternative model for the discriminatory pricing behavior of physicians. By introducing search cost explicitly, it generates a result that price discrimination will be practiced by all physicians even if the elasticity of market demand is less than one and all or most of the physicians are profit-maximizers. The proposed model also explains the history and the recent trend of pricing behavior in medicine and may further explain some of the political actions of the American Medical Association.

Date: 1974
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:9:y:1974:i:1:p:63-79

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