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An agency relationship under general conditions of uncertainty: a game theory application to the doctor–patient interaction

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  • Dionysius Glycopantis

    (City, University of London)

  • Charitini Stavropoulou

    (City, University of London)

Abstract

The supply of information, particularly of bad news, in an agency relationship is a sensitive issue. We employ a game theory approach to investigate conflicts in the particular case of the doctor–patient relationship when information affects the emotions of patients. The doctor does not know the type of agent and the patient does not know how much information he is given. Hence, the paper obtains results when there is conflict, rather than common interest in the objectives of the two parties. The perfect Bayesian equilibrium describes beliefs and strategies which guarantee adherence to the doctor’s recommendation. We show also that the patient may non-adhere to the recommendation not only when the doctor fails to identify the patient’s needs but also if he falsely believes that the doctor has not done so.

Suggested Citation

  • Dionysius Glycopantis & Charitini Stavropoulou, 2018. "An agency relationship under general conditions of uncertainty: a game theory application to the doctor–patient interaction," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(1), pages 15-28, April.
    • Handle: RePEc:spr:etbull:v:6:y:2018:i:1:d:10.1007_s40505-017-0120-9
    DOI: 10.1007/s40505-017-0120-9
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    References listed on IDEAS

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    1. Dionysius Glycopantis & Charitini Stavropoulou, 2011. "The Supply of Information in an Emotional Setting," CESifo Economic Studies, CESifo Group, vol. 57(4), pages 740-762, December.
    2. Andrew Caplin & John Leahy, 2004. "The supply of information by a concerned expert," Economic Journal, Royal Economic Society, vol. 114(497), pages 487-505, July.
    3. Barigozzi, Francesca & Levaggi, Rosella, 2008. "Emotions in physician agency," Health Policy, Elsevier, vol. 88(1), pages 1-14, October.
    4. Dionysius Glycopantis & Allan Muir & Nicholas Yannelis, 2009. "On non-revealing rational expectations equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(2), pages 351-369, February.
    5. Dionysius Glycopantis & Allan Muir & Nicholas C. Yannelis, 2003. "On extensive form implementation of contracts in differential information economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 495-526, March.
    6. Andrew Caplin & John Leahy, 2001. "Psychological Expected Utility Theory and Anticipatory Feelings," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 55-79.
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    More about this item

    Keywords

    Doctor–patient relationship; Adherence; Psychological expected utility; Non-cooperative game theory; Perfect Bayesian equilibrium;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • I10 - Health, Education, and Welfare - - Health - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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