Competition, Conformism and the Voluntary Adoption of Policies Designed to Freeze Prices

Mathieu Lambotte and Benjamin Montmartin
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Benjamin Montmartin: SKEMA Business School, Université Côte d'Azur (GREDEG)

No 2025-17, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This paper proposes a structural approach to examine voluntary participation in a pricing scheme aimed at freezing prices, focusing on self-employed professions. We develop a binary choice model under incomplete information that captures two distinct micro-founded interaction mechanisms: spatial competition and conformity to social norms. We apply our game-theoretic framework to analyze the adoption of a novelpricing scheme offered to French private physicians, designed to freeze fees while compensating them through economic benefits. Our analysis leverages a unique geolocalized dataset covering the entire population of pediatricians, gynecologists, and ophthalmologists. We find compelling evidence of a significant preference for conformity, whereas competitive interactions appear to play a negligible role in physicians' decision-making. These findings offer a strong rationale for the observed low adoption rate of this pricing regulation policy.

Keywords: binary choice; competition; social interactions; pricing scheme; physicians (search for similar items in EconPapers)
JEL-codes: D04 I11 I18 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2025-04, Revised 2025-07
New Economics Papers: this item is included in nep-com and nep-hea
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http://195.220.190.85/GREDEG-WP-2025-17.pdf Revised version, 2025-07 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2025-17

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