Taking evolutionary view of markets, Harold Demsetz hypothesized that firms differ persistently in efficiency and that industry concentration results from growth of efficient firms at the expense of inefficient ones. We test the hypothesis with high quality microdata from the US hospital...

Most scholars and antitrust cases have defined hospital service markets as primarily local. But, two recent decisions have greatly expanded geographic markets, incorporating hospitals as far as 100 miles apart. Managed care plans, now important in most markets, were believed to shift patients to...