Countervailing Market Power and Consumer Surplus: An Empirical Examination
AEA Papers and Proceedings
vol. 110,
May 2020
(pp. 579-83)
Abstract
A current debate in antitrusts analyzes whether to allow horizontal agreements that counteract large imbalances of power in vertical negotiations. We leverage detailed data to empirically assess the consequences for patients of a recent case in which a group of physicians in Chile formed a trade association to improve their bargaining position with insurers. As a result of this agreement, out-of-pocket costs increased by 160 percent. Overall, we find large decreases in consumer surplus.Citation
Alé-Chilet, Jorge, and Juan Pablo Atal. 2020. "Countervailing Market Power and Consumer Surplus: An Empirical Examination." AEA Papers and Proceedings, 110: 579-83. DOI: 10.1257/pandp.20201012Additional Materials
JEL Classification
- G22 Insurance; Insurance Companies; Actuarial Studies
- I11 Analysis of Health Care Markets
- I13 Health Insurance, Public and Private
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- G22 Insurance; Insurance Companies; Actuarial Studies