Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195544 
Year of Publication: 
2017
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 8 [Issue:] 2 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2017 [Pages:] 397-433
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
This paper proposes a method to estimate price sensitivity of economic agents exploiting discontinuity in nonlinear contracts. As an application, we study contracts between a managed care organization and hospitals for organ transplants. Exploiting donut holes in the reimbursement contracts, we show that the impact of the reimbursement rate on hospitals' provision of health care services varies significantly across patients with different levels of illness severity. Our methodology is applicable to important classes of models such as consumer choice under nonlinear pricing and contracting with nonlinear incentives.
Subjects: 
Nonlinear contracts
heterogeneity in price sensitivity
health care
JEL: 
C10
C51
I11
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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