Consider the symmetric equilibrium of a monopolistically competitive industry in which manufacturers select price and quality to maximize expected profit and consumers maximize utility by conducting costly search among sellers using an optimal sequential search role. Consumers search among...

Since the Food and Drug Administration (FDA) Amendments of 1962, the average time from a drug's first worldwide patent application to its approval by the FDA has risen from 3.5 to 13.5 years. FDA policies and manufacturers' incentives suggest that more important drugs may have reached the market...

This paper examines how differentiation among Health Maintenance Organizations (HMOs) affects local market competition. Most markets for HMOs appear sufficiently unconcentrated; however, differences among HMOs may make competition less intense than the number of competitors would suggest. To...

This paper examines the relationship between basic and applied pharmaceutical research. The authors focus on three stages of R&D: government-funded basic research; publication in medical journals; and industry-funded applied R&D. They estimate that a one percent increase in basic research in a...

This paper investigates whether managers who fail to exploit regulatory loopholes are vulnerable to replacement. We use the U.S. hospital industry in 1985-1996 as a case study. A 1988 change in Medicare rules widened a pre-existing loophole in the Medicare payment system, presenting hospitals...

Prior studies find that the growth of managed care through the early 1990s introduced a strong positive relationship between price and concentration in hospital markets. We hypothesize that the relaxation of constraints on consumer choice in response to a "managed care backlash" has diminished...