Resumen
We study the ability choices and pricing strategies of physicians in a duopolistic market where consumers base their decisions on anecdotes. The consumers are aware of only some of the physicians and estimate their abilities by taking a sample from the patients a physician has previously treated. In this setting, situations arise where physicians have incentives to choose a low level of ability even when it is costless. Namely, more information availability leads to more ability differentiation and a lower average level in equilibrium. Conversely, an equilibrium where both physicians choose a maximum ability is possible when information on at least one of the physicians is not readily available.
Idioma original | Inglés |
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Páginas (desde-hasta) | 245-267 |
Número de páginas | 23 |
Publicación | Metroeconomica |
Volumen | 73 |
N.º | 1 |
DOI | |
Estado | Publicada - feb. 2022 |