We explore how competition between physicians affects medical service provision. Previous research has shown that …, without competition, physicians deviate from patient-optimal treatment under payment systems like capitation and fee …-for-service. While competition might reduce these distortions, physicians usually interact with each other repeatedly over time and only …

In a laboratory experiment designed to capture key aspects of the interaction between physicians and patients, we study … physicians' market shares. Medical treatment is an example of a credence good: only the physician knows the appropriate treatment … consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment …