Product differentiation and welfare in a mixed duopoly with regulated prices: the case of a public and a private hospital

Annika Herr

No 08/2009, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

Abstract: Hospital markets are often characterised by price regulation and the existence of different ownership types. Using a Hotelling framework, this paper analyses the effect of different objectives of the hospitals on quality, profits, and overall welfare in a price regulated duopoly with symmetric locations. In contrast to other studies on mixed oligopolies, this paper shows that in a duopoly with regulated prices privatisation of the public hospital may increase overall welfare depending on the difference of the hospitals' marginal costs and the weight of the additional public hospital's motive.

Keywords: mixed oligopoly; price regulation; quality; hospital competition (search for similar items in EconPapers)
JEL-codes: H42 I18 L13 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-com, nep-hea, nep-ind and nep-reg
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwqwdp:082009

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