Using a spatial competition framework with three ex ante identical hospitals, we study the effects of a hospital merger … on quality, price and welfare. The merging hospitals always reduce quality, but the non-merging hospital responds by … responsiveness to quality is sufficiently low, whereas the non-merging hospital always increases its price. If prices are endogenous …

We study the effects of a hospital merger using a spatial competition framework with semialtruistic hospitals that … increase average quality in the market. If a merger leads to hospital closure, the resulting effect on quality is positive … (complements). A merger leads to higher average treatment cost efficiency and, if qualities are strategic substitutes, might also …