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The Response to Market Power: Non-Profit Hospitals versus For-Profit Hospitals

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  • Peter Zaleski
  • Alfredo Esposto

Abstract

In the debate over whether non-profit and for-profit hospitals behave differently in the presence of market concentration and greater individual market power, most scholars have concentrated on the traditional price analysis approach. But this has produced conflicting results. This study attempts to avoid the limitations of price as an indicator of how these hospitals respond to greater market power by examining changes in admissions given the capacity decision. The results indicate that for-profit and public hospitals respond similarly to increased market power. On the other hand, private non-profit hospitals appear to act differently. This presents important implications for antitrust policies and for the management of non-profit hospitals. Copyright International Atlantic Economic Society 2007

Suggested Citation

  • Peter Zaleski & Alfredo Esposto, 2007. "The Response to Market Power: Non-Profit Hospitals versus For-Profit Hospitals," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(3), pages 315-325, September.
    • Handle: RePEc:kap:atlecj:v:35:y:2007:i:3:p:315-325
    DOI: 10.1007/s11293-007-9072-z
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    References listed on IDEAS

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    More about this item

    Keywords

    Non-Profits; Hospitals; Capacity; D21;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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