We study the impact a redistribution of income has on the decisions of a health care innovator and the utility of consumers. We find that income redistribution from rich to poor increases the quality of the medical innovation, reduces its price and increases the utility of some of the consumers...

This research proposes that consumers hold “lay theories of medicine” that guide their preferences and behaviors in the health domain. Lay theories of medicine incorporate lay beliefs about illnesses and symptoms (i.e., a form of lay diagnosis that may feature causal [un]certainty) and lay...