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Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.

In a standard model of vertical differentiation, wage is assumed to determine the quality. Wage is also subject to bargaining. Increased bargaining power of the worker in the low quality firm reduces quality differential, and increases price competitiveness. The Opposite happens from a similar change in the high quality firm.

In many markets, such as education, health care and public utilities, firms are often profit-constrained either due to regulation or because they have non-profit status. At the same time such firms might have altruistic concerns towards consumers. In this paper we study semi-altruistic firms’ incentives to invest in quality and cost-reducing effort when facing constraints on the distribution of profits. Using a spatial competition framework, we derive the equilibrium outcomes under both quality competition with regulated prices and quality price competition. Profit constraints always lead to lower cost-efficiency, whereas the effects on quality and price are ambiguous. If altruism is high (low), profit-constrained firms offer higher (lower) quality and lower (higher) prices than firms that are not profit-constrained. Compared with the first-best outcome, the cost-efficiency of profit-constrained firms is too low, while quality might be over- or underprovided. Profit constraints may improve welfare and be a complement or substitute to a higher regulated price, depending on the degree of altruism., Fundação para a Ciência e a Tecnologia (FCT)

This paper analyzes the relationship between competition and R&D cooperation with universities and competitors. Our simple model predicts that more competitors reduce the incentives for horizontal cooperation as it diminishes the gains from “collusion”. Assuming that the value of synergies and spillovers created by cooperation depends on competition intensity reveals two distinct and opposing incentives for cooperation. While synergies foster R&D cooperation, spillovers may hinder cooperation. We mainly hypothesize that university cooperation corresponds to product innovation and hence quality competition, while horizontal cooperation lead to process innovations and therefore relates to price competition. We test these hypotheses based on Swiss firm-level panel data controlling for simultaneity of cooperation decisions and endogeneity of competition. Our empirical analysis supports the relevance of distinguishing between competition dimensions and cooperation partners, respectively. We find that price competition matters for both university and horizontal cooperation and it takes the form of an inverted U-shape. On the contrary, quality competition only matters for university cooperation and the relationship shows a U-form. Moreover we see that the number of principal competitors is significantly related only to cooperation between competitors and the relationship shows an inverted U-form. Hence, markets with a medium number of competitors are more receptive for horizontal cooperation. In sum these findings advance our understanding of the relationship between innovation and competition policy., KOF Working Papers, 275

We study incentives for quality provision in markets where providers are motivated (semi-altruistic); prices are regulated and firms are funded by a combination of block grants and unit prices; competition is based on quality, and demand adjusts sluggishly. Health or education are sectors in which the mentioned features are the rule. We show that the presence of motivated providers makes dynamic competition tougher, resulting in higher steady-state levels of quality in the closed-loop solutions than in the benchmark open-loop solution, if the price is sufficiently high. However, this result is reversed if the price is sufficiently low (and below unit costs). Sufficiently low prices also imply that a reduction in demand sluggishness will lead to lower steady-state quality. Prices below unit costs will nevertheless be welfare optimal if the providers are sufficiently motivated., Fundação para a Ciência e a Tecnologia (FCT)

application/pdf, Subsequently published in B. E. Journal of Theoretical Economics, 2011, vol. 11, Article 16, pp. 1-27., 本文フィルはリンク先を参照のこと

A competitive rent-seeking club (CRSC) offers its members the chance of winning a prize (status, position, privilege) by being selected, typically, by a civil servant or a politician. The selector replaces in our setting the usual contest success function; instead of determining the winner on the basis of the club-members' efforts, he selects the winner on the basis of quality. This paper focuses on the effect of incomplete search of the selector on the efficiency of democratic self-governing and decentralized RSC's that control admittance to the club and its transparency, assuming that quality of their members is fixed. The incomplete search of the selector is assumed to take the simple form of fixed random sampling of the contestants - the members of the CRSC. Our results imply that, even when active rent-seeking expenditures are disregarded, the decisions of CRSC's regarding their composition and transparency tend to reduce quality and are therefore inefficient.

Mobile students and graduates react to the institutional framework of higher education and on their turn induce changes in governmental policies. In this article, we are interested in how governmental decisions about the financial regime and the quality level of higher education interact with individual incentives to invest in higher education in closed economies and in economies open to migration. We show that mobility of (part of) the population results in a situation where the optimal instruments of the closed economy are no longer necessarily viable. The aim of the article is to derive policy implications as to the optimal financial regime and quality level of higher education in the presence of migration opportunities. (JEL codes: H77, I22, I28) Copyright , Oxford University Press.

We study the competitive effects of restricting direct access to secondary care by gatekeeping, focusing on the informational role of general practitioners (GPs). In the secondary care market there are two hospitals choosing quality and specialisation. Patients, who are ex ante uninformed, can consult a GP to receive an (imperfect) diagnosis and obtain information about the secondary care market. We show that hospital competition is amplified by higher GP attendance but dampened by improved diagnosing accuracy. Therefore, compulsory gatekeeping may result in excessive quality competition and too much specialisation, unless the mismatch costs and the diagnosing accuracy are sufficiently high. Second-best price regulation makes direct regulation of GP consultation redundant, but will generally not implement first-best.

We analyze in a simple model the consequences of efficiency heterogeneity at the firm level for the sorting of workers with different skills into firms with different characteristics. We show that more efficient firms tend to produce higher quality output in equilibrium, which then translates into higher relative demand of education and unmeasured skills. The model provides an integrated explanation within a competitive framework for the observed correlations between several establishment characteristics (size, employees’ average education, capital/labor ratio, and remoteness of selling markets) and average wages. We test the implications of the model using Spanish employer-employee matched data that allow to simultaneously control for establishment and worker characteristics. We find that average education in the establishment is increasing in the remoteness of its main market. Establishment’s size, remoteness of main market, and co-workers’ average education have significant, robust and quantitatively important positive joint effects on wages. The national-market orientation effects (with respect to local-market orientation) on labor composition and wages are at least as important as the international-market effects (with respect to national-market orientation). All wage premia are non-decreasing on worker education and most of them are strictly increasing, suggesting that unmeasured skills are relatively more important for high-education workers.

This paper examines whether integration of national markets fosters innovation in the technologically inferior country. In a simple set up where a technologically backward home firm and a technologically advanced foreign firm compete in qualities and prices in an integrated market, we find that the outcome depends on the speed of response of the two firms and their initial technological distance. If the domestic firm is not too far behind the foreign firm to begin with, and if it responds faster, then the technological gap may get reversed. Further, we find that integration may be welfare improving for both the countries. There are, however, distributional implications. While the consumers always gain from such integration, the firms may not.

In this work we emphasize why market coverage should be considered endogenous for a correct analysis of entry deterrence in vertical differentiation models and discuss the implications of this endogeneity for that analysis. We consider contexts without quality costs and also contexts with convex fixed quality costs. Research support from the Plan Nacional de I+D+I (projects BEC2000-0301 and BEC2003-02084 - J.M. Usategui).

We study the competitive effects of restricting direct access to secondary care by gatekeeping, focusing on the informational role of gatekeeping general practitioners (GPs). We consider a secondary care market with two hospitals choosing the quality and specialisation of their care. GPs perfectly observe the diagnosis of a patient and the exact characteristics of the secondary care market. Patients are either informed or uninformed when accessing the hospital market. We consider two distinct cases: first, we let the fraction of informed patients be exogenous, implying that the regulator can only influence patients' decision of consulting a GP by making this compulsory ('direct gatekeeping'). Second, we endogenise this fraction by assuming GP consultation to be costly for the patient. Then the reulator can influence the GP attendance rate through the regulated price ('indirect gatekeeping'). A main finding of the paper is that strict gatekeeping may not be socially desirable, even if it is costless.

This paper shows that the reform on the structures of the Polish economy has had an impressively fast effect on the numbers of different products this country exports to Western countries. The time path may well be described by a logistic curve. The change in the exports of this country may therefore be characterised by a widening, instead of a deepening in specialisation. The paper introduces a new empirical methodology to evaluate the dynamic changes in export activities of a country. The result of this new methodology is that quality competition is becoming increasingly important for Poland over time.

"We use a model of horizontal and vertical differentiation to study physicians' incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner cannot implement the first-best policy. Moreover, the second-best policy is time inconsistent. Excess entry and firstbest efficient total quality provision is observed in the game without commitment. Allowing physicians to compete in prices does not solve the commitment problem since the competitive solution coincides with the time consistent outcome. In the median voter equilibrium the time consistency problem is more severe." (author's abstract) "In einem Modell der horizontalen und vertikalen Produktdifferenzierung werden die ärztlichen Anreize, medizinische Qualität bereitzustellen, in Gegenwart von Preisregulierung untersucht. In Gegenwart zweier strategischer Variablen kann ein ausschließlich preisregulierender sozialer Planer das erstbeste Wohlfahrtsoptimum nicht implementieren. Darüber hinaus ist das zweitbeste Wohlfahrtsoptimum nicht zeitkonsistent. Mit zeitkonsistenter Regulierung ergibt sich eine effiziente Qualität medizinischer Leistungen, jedoch eine zu hohe Arztdichte. Preiswettbewerb zwischen den Ärzten führt zur selben Allokation wie bei zeitkonsistenter Regulierung. Die Probleme des Gesundheitsmarktes lassen sich somit nicht durch mehr Wettbewerb lösen. Das Zeitkonsistenzproblem ist noch gravierender, wenn über den Preis durch eine Mehrheitsabstimmung entschieden wird. Wendet man das Modell auf den deutschen Gesundheitsmarkt an, so zeigt sich, dass die kassenärztliche Zulassung - trotz Bedarfsplanung - zu großzügig ist." (Autorenreferat)

Increasing environmental awareness may affect the pleasure of consuming a good for which an environmental friendly substitute is available. When deciding to buy differentiated products, a compromise is sometimes made between preferred characteristics of the good and its environmental properties. In this paper we investigate the market implication of product differentiation when customers are concerned about environmental aspects of the good. We use the spatial duopoly model to determine how environmental concern affects prices, product characteristics and market shares of the competing firms. Our analysis is based on a two-stage game where at the first stage each firm chooses the characteristic of its product. At the second stage each firm chooses its price. The unique equilibrium prices and market shares are affected by consumer awareness of the environment and by the higher costs for producing those goods. As for the Nash equilibria in the characteristics we find three equilibria depending on the parameter constellation. In order to find out whether the market functions in an optimal way we determined the choice of environmental characteristics by a welfare maximizing authority. The result of this analysis is that characteristics differ under private decision making and social one. It can be shown, however, that it is possible to choose environmental policy instruments in order to stimulate private firms to produce the social optimal qualities.

This paper studies the role of quality competition in endogenous growth and institutional factors which can affect growth through affecting quality competition. The R&D-based growth literature as it stands attributes the incentives for innovations to monopolist market structure, and regards the driving force of growth being 'the rent-pull'. This paper presents a 'competition-push' theory of growth by considering an environment where firms can coexist and compete in quality within the same markets. Quality competition takes the form of vertical product differentiation or cost-reducing process innovation, which requires endogenous fixed R&D costs. Due to the nonrival and excludable features of 'quality' and consequent nonconvexity, market concentration naturally occurs in a manner such that R&D intensity and market structure are determined simultaneously in equilibrium. The main conclusions are that quality competition suffices to provide incentives for innovation at industry level, and through knowledge spillovers it also drives aggregate technical progress, that institutional restriction on free entry into quality competition may be desirable to some degree, but monopolization is usually not optimal, that credit constraint which limits quality competition is detrimental to growth.

This paper presents a detailed econometric investigation of vertical product (i.e. quality) differentiation in EU markets. Use is made of trade statistics at the most detailed (8-digit CN) level to analyse the pattern of quality positioning in EU trade (of EU memebers and non-EU countries.) Two different 'quality indicators' are devised one refers to the relative representation of producers in different quality segments in EU markets, the other amounts to the compilation of industry-level price gaps. Evidence is found for dramatic and rather stable hierarchical structures in the product qualities supplied by different national producers. The quality hierarchies are then related to a host of supply-side variables wage rates, productivity levels, industrial research and development spending, exchange rate movements. the econometric analyses supports arather robust explanatory framework relating the quality positioning of national producers to their relative supply-side characteristics.

We develop a new model of multi-product firms which invest to improve the perceived quality of both their individual products and their brand. Because of flexible manufacturing, products closer to firms' core competence have lower costs, so firms produce more of them, and also have higher incentives to invest in their quality. These two effects have opposite implications for the profile of prices. Mexican data provide robust confirmation of the model's key prediction: firms in differentiated-good sectors exhibit quality-based competence (prices fall with distance from core competence), but export sales of firms in non-differentiated-good sectors exhibit the opposite pattern.