Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23466
Authors: 
Dafny, Leemore
Year of Publication: 
2003
Series/Report no.: 
CSIO working paper / Northwestern University, Center for the Study of Industrial Organization 0037
Abstract: 
This paper examines the strategic behavior of hospitals in one of their primary output markets: inpatient surgical procedures. High levels of learning-by-doing in surgical fields may act as a barrier to entry. I investigate whether incumbent hospitals facing prospective entry in a procedure market manipulate their procedure volumes to produce such a barrier. I derive straightforward empirical tests from a model of patient demand, procedure quality, and di.erentiated product competition. Using hospital data on electrophysiological studies, an invasive cardiac procedure, I find evidence of entry-deterring investment in procedure volume. These findings suggest that competitive motivations may play a role in treatment decisions.
Document Type: 
Working Paper

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