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Brekke, Kurt Richard - 2015

We study the effects of horizontal mergers when firms compete on quality and price. Two key factors are identified: (i) the magnitude of variable quality costs, and (ii) the relative magnitudes of cross-quality and cross-price effects on demand. The merging firms will increase (reduce) both...

Persistent link: https://www.econbiz.de/10013019860

Can Competition Reduce Quality?

Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune - CESifo - 2014

In a spatial competition setting there is usually a non-negative relationship between competition and quality. In this paper we offer a novel mechanism whereby competition leads to lower quality. This mechanism relies on two key assumptions, namely that the providers are motivated and...

Persistent link: https://www.econbiz.de/10010741317

Reference Pricing, Competition, and Pharmaceutical Expenditures: Theory and Evidence from a Natural Experiment

Brekke, Kurt R.; Holmås, Tor Helge; Straume, Odd Rune - CESifo - 2010

We study the impact of regulation on competition between brand-names and generics and pharmaceutical expenditures using a unique policy experiment in Norway, where reference pricing (RP) replaced price cap regulation in 2003 for a sub-sample of off-patent products. First, we construct a vertical...

Persistent link: https://www.econbiz.de/10008799730

Margins and Market Shares: Pharmacy Incentives for Generic Substitution

Brekke, Kurt R.; Holmås, Tor Helge; Straume, Odd Rune - CESifo - 2012

We study the impact of product margins on pharmacies’ incentive to promote generics instead of brand-names. First, we construct a theoretical model where pharmacies can persuade patients with a brand-name prescription to purchase a generic version instead. We show that pharmacies’...

Persistent link: https://www.econbiz.de/10010603857

Hospital Competition with Soft Budgets

Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune - CESifo - 2013

We study the incentives for hospitals to provide quality and expend cost-reducing effort when their budgets are soft, i.e., the payer may cover deficits or confiscate surpluses. The basic set up is a Hotelling model with two hospitals that differ in location and face demand uncertainty, where...

Persistent link: https://www.econbiz.de/10010604418

Hospital Competition and Quality with Regulated Prices

Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune - CESifo - 2009

We analyse the effect of competition on quality in hospital markets with regulated prices, considering both the effect of (i) introducing competition (monopoly versus competition) and (ii) increasing competition through lower transportation costs (increased substitutability) or a higher number...

Persistent link: https://www.econbiz.de/10005000366

Competition and Quality in Regulated Markets with Sluggish Demand

Brekke, Kurt R.; Cellini, Roberto; Siciliani, Luigi; … - CESifo - 2010

We investigate the effect of competition on quality in regulated markets (e.g., health care, higher education, public utilities), using a Hotelling framework, in the presence of sluggish demand. We take a differential-game approach, and derive the open-loop solution (providers choose the optimal...

Persistent link: https://www.econbiz.de/10008572490

Reference Pricing of Pharmaceuticals

Brekke, Kurt R.; Königbauer, Ingrid; Straume, Odd Rune - CESifo - 2006

We consider a therapeutic market with potentially three pharmaceutical firms. Two of the firms offer horizontally differentiated brand-name drugs. One of the brand-name drugs is a new treatment under patent protection that will be introduced if the profits are sufficient to cover the entry...

Persistent link: https://www.econbiz.de/10005406396

Pharmaceutical Patents: Incentives for R&D or Marketing?

Brekke, Kurt R.; Straume, Odd Rune - CESifo - 2008

We analyse how a patent-holding pharmaceutical firm may strategically use advertising of existing drugs to affect R … industry. Within a fairly generalmodel framework, we derive exact conditions for advertising and R&D being substitute … strategies for the incumbent firm and show that it may overinvest in advertising to reduce the incentive for an entrant to invest …

Persistent link: https://www.econbiz.de/10005416463

Competition and Waiting Times in Hospital Markets

Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune - CESifo - 2007

This paper studies the impact of hospital competition on waiting times. We use a Salop-type model, with hospitals that differ in (geographical) location and, potentially, waiting time, and two types of patients; high-benefit patients who choose between neighbouring hospitals (competitive...

Persistent link: https://www.econbiz.de/10005416510