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Full-Text Articles in Social and Behavioral Sciences
Bargaining In Hospital Merger Models, David J. Balan, Keith Brand
Bargaining In Hospital Merger Models, David J. Balan, Keith Brand
David J. Balan
Hospital prices for commercially-insured patients are generally set through bilateral negotiations with health insurance companies. Reflecting common industry practice, contemporary models of hospital/health insurer bargaining usually assume that multi-hospital systems bargain on an all-or-nothing basis. However, hospitals within systems may bargain separately, and a commitment to do so is sometimes put forward as a remedy for an otherwise anticompetitive merger. We analyze and compare the merger-induced changes in equilibrium prices in a Nash Bargaining framework under these two modes of bargaining. We show that, while the magnitude of price effects under either mode depends critically on the degree of pre-merger …
Product Markets And Industry-Specific Training, Armin Schmutzler, Hans Gersbach
Product Markets And Industry-Specific Training, Armin Schmutzler, Hans Gersbach
Armin Schmutzler
We develop a product market theory to explain why firms provide their workers with skills that are also useful to their competitors. Firms first decide whether to invest in industry-specific training, then make wage offers for each others’ trained employees and finally engage in imperfect product market competition. Equilibria with and without training can emerge. If competition is soft, firms invest in training if others do. Thereby, they avoid having to pay high wages for trained workers. Furthermore, we draw welfare conclusions from the analysis. Finally, we discuss how our ideas apply to supplier relationships and to general training.
Competition Policy Issues In The Consumer Payments Industry, Nicholas Economides
Competition Policy Issues In The Consumer Payments Industry, Nicholas Economides
Nicholas Economides
We discuss the current structure of card networks that facilitate transactions between merchants and consumers. We find that presently fees for this intermediation are considerably higher than costs. This is facilitated by rules imposed by the card networks on the merchants that do not allow merchants to steer competition to cards that have lower fees. It has also been facilitated by the requirement that a merchant has to accept all cards of the same network (honor all cards rule) -- recently abolished in the US, as well as by the fact that the networks set the maximum interface fee between …