Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Health insurance markets provide rich data for examining important questions in economics. First, does seller market power increase buyers' prices and by how much? Dafny, Duggan, and Ramanarayanan use exogenous shocks from national mergers of insurers to estimate the impact on prices of insurer consolidation. Second, at what level of rationality do people negotiate? Dranove, Satterthwaite, and Sfekas apply the Stole/Zweibel bargaining model to examine contracting between insurers and hospitals. Third, given asymmetric information, how do actual contracts compare to constrained efficient contracts, and how can we increase contract efficiency using measurable heterogeneity? Town, Bajari, and Tadelis use 10 years of data on contracts between an insurer and over 100 transplant hospitals