We analyze quality competition between hospitals under vertical health care services differentiation and price regulation. We show that a regulator can set a price to achieve the first-best level of quality for any market structure. However, under free entry, the number of entering hospitals at...

When the seller has only incomplete information about the agents' willingness to pay for the good up for sale, under the hypothesis of risk neutraly, an optimal auction does not lead to the full appropriation of the surplus by the seller when the agents' evaluations are independent. This result...

This paper analyses hospitals' regulation when health care demand is quality responsive and when the providers can reduce their costs by an unobservable effort. Socially optimal policy is characterised. We show that the so-called "envelope policy" can imply allocative and productive efficiency...