Second Opinions in Markets for Expert Services: Experimental Evidence

Mimra, Wanda; Rasch, Alexander; Waibel, Christian

doi:10.2139/ssrn.2398953

Cited by 17 publications

(31 citation statements)

References 47 publications

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“…Our experiment is also related to a stream of experimental literature investigating credence goods, in particular Beck et al (2013Beck et al ( , 2014 and Mimra et al (2013Mimra et al ( , 2014. A close match to our study is Dulleck et al (2011).…”

supporting

confidence: 68%

Medical Insurance and Free Choice of Physician Shape Patient Overtreatment: A Laboratory Experiment

et al. 2014

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In a laboratory experiment designed to capture key aspects of the interaction between physicians and patients, we study the effects of medical insurance and competition in the guise of free choice of physician, including observability of physicians' market shares. Medical treatment is an example of a credence good: only the physician knows the appropriate treatment, the patient does not. Even after a consultation, the patient is not sure whether he received the right treatment or whether he was perhaps overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insurance: most patients seek treatment, but overtreatment is moderated.

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supporting

confidence: 68%

Medical Insurance and Free Choice of Physician Shape Patient Overtreatment: A Laboratory Experiment

et al. 2014

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“…They find that insurance increases both physician attendance and overtreatment, whereas competition reduces the occurrence of overtreatment. Mimra, Rasch, and Waibel (2016b) allow clients to obtain costly second opinions, which leads to less overtreatment, although customers make use of it less often as predicted. Mimra, Rasch, and Waibel (2016a) study the interaction of competition and reputation in a credence good context.…”

Section: Introductionmentioning

confidence: 99%

Separation of prescription and treatment in health care markets: A laboratory experiment

2017

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SummaryHealth care is a credence good, and its market is plagued by asymmetric information. In this paper, we use a laboratory experiment to test the performance of a potential remedy discussed in the applied literature, the separation of prescription and treatment activities. We observe a significant amount of overtreatment (and a smaller nonpredicted amount of undertreatment) in our baseline environment. Requiring a different than the treating physician to provide diagnosis and prescription for free is an effective way to reduce overtreatment in our laboratory setting. This effect, however, is partially offset by an increased frequency of undertreatment. Allowing prescription and treatment physicians to independently set prices for their services reduces efficiency due to coordination failures:In sum, prices are often higher than expected benefit of patients, who in turn do not attend to the physician. Also contrary to theory, bargaining power does not play a significant role for the distribution of profits between physicians.

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“…Homogeneous consumers are only aware that they suffer from either a minor or a serious problem with common probabilities 1 Liability precludes experts from undertreating consumers, while verifiability precludes overcharging. (Bonroy et al 2013;Kerschbamer 2006, 2009;Dulleck et al 2011;Mimra et al 2013Mimra et al , 2014Wolinsky 1993).…”

Section: Introductionmentioning

confidence: 99%

“…above. Each session features one market for expert services comprising twelve subjects, similar toMimra et al (2014). Subjects are randomly assigned to the role of an expert or consumer.The roles remain constant throughout the eight periods of the game.…”

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confidence: 99%

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Consumer Information in a Market for Expert Services: Experimental Evidence

2016

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Markets for expert services are characterized by information asymmetries between experts and consumers. We analyze the effects of consumer information, where consumers suffer from either a minor or serious problem and only experts can infer the appropriate treatment. Consumer information is a noisy signal that is informative about a consumer's problem severity. In a laboratory experiment, we show that consumers are generally reluctant to accept expensive treatment recommendations, which is endorsed by good signals and fundamentally changed by bad signals. Experts condition their cheating on a consumer's risk of suffering from a serious problem if they can observe consumer information. Accordingly, experts and low-risk consumers benefit at the expense of more frequently cheated high-risk consumers. Consumer information leads to more appropriate treatments being carried out and thus superior overall welfare. In contrast to our theoretical predictions, this effect does not depend on hiding consumer information for experts.

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Second Opinions in Markets for Expert Services: Experimental Evidence

Cited by 17 publications

References 47 publications

Medical Insurance and Free Choice of Physician Shape Patient Overtreatment: A Laboratory Experiment

Medical Insurance and Free Choice of Physician Shape Patient Overtreatment: A Laboratory Experiment

Separation of prescription and treatment in health care markets: A laboratory experiment

Consumer Information in a Market for Expert Services: Experimental Evidence

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