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Optimal Rationing within a Heterogeneous Population

Author

Listed:
  • Philippe Choné

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Stéphane Gauthier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

A government agency delegates to a provider (hospital, medical gatekeeper, school, social worker) the decision to supply a service or treatment to individual recipients. The agency does not perfectly know the distribution of individual treatment costs in the population. The single-crossing property is not satisfied when the uncertainty pertains to the dispersion of the distribution. We find that the provision of service should be distorted upwards when the first-best efficient number of recipients is sufficiently high.

Suggested Citation

  • Philippe Choné & Stéphane Gauthier, 2017. "Optimal Rationing within a Heterogeneous Population," PSE-Ecole d'économie de Paris (Postprint) hal-01300824, HAL.
    • Handle: RePEc:hal:pseptp:hal-01300824
    Note: View the original document on HAL open archive server: https://hal.science/hal-01300824
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    References listed on IDEAS

    as
    1. Araujo, Aloisio & Moreira, Humberto, 2010. "Adverse selection problems without the Spence-Mirrlees condition," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1113-1141, May.
    2. Jullien, Bruno, 2000. "Participation Constraints in Adverse Selection Models," Journal of Economic Theory, Elsevier, vol. 93(1), pages 1-47, July.
    3. Brigitte Dormont & Carine Milcent, 2005. "How to Regulate Heterogeneous Hospitals?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 591-621, September.
    4. repec:dau:papers:123456789/5425 is not listed on IDEAS
    5. James M. Malcomson, 2005. "Supplier Discretion Over Provision: Theory and an Application to Medical Care," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 412-429, Summer.
    6. De Fraja, Gianni, 2000. "Contracts for health care and asymmetric information," Journal of Health Economics, Elsevier, vol. 19(5), pages 663-677, September.
    7. Lewis, Tracy R. & Sappington, David E. M., 1989. "Countervailing incentives in agency problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 294-313, December.
    8. Brigitte Dormont & Carine Milcent, 2005. "How to Regulate Heterogeneous Hospitals?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 591-621, September.
    9. Miltiadis Makris & Luigi Siciliani, 2013. "Optimal Incentive Schemes for Altruistic Providers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(5), pages 675-699, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    provision of service; service; treatment;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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