between firms. We test this in obstetrics markets, relying on random assignment of patients to physicians to generate unbiased …

superficial. Using a large, detailed panel of new obstetricians, we find that, even though physicians' maternal complication rates … physicians' delivery volume develop in a way partially consistent with Bayesian learning about physician quality. In particular …, as physicians gain experience, their volume becomes increasingly sensitive to the information in their accumulated prior. …