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Testing for Price Leadership and for Reputation Goods Effects: Swedish Dental Services

Author

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  • Eriksson, Rickard

    (Swedish Institute for Social Research, Stockholm University)

Abstract

Sweden deregulated the prices for dental services in 1999. Twenty-one Swedish county councils provide public dental services. They compete with 3000 small independent private firms. Public and private providers are subsidized by the government to an equal extent, but most of the costs are borne by the consumers. The private firms’ price setting is strongly influenced by the county councils’ prices after the deregulation, i.e. the county councils act as price leaders. Prices increased more in large markets, which is consistent with dental services being a reputation good. There was no effect of the dentist’s gender on prices, but immigrant dentists increased their prices slightly less than native ones.

Suggested Citation

  • Eriksson, Rickard, 2004. "Testing for Price Leadership and for Reputation Goods Effects: Swedish Dental Services," Working Paper Series 5/2004, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2004_005
    as

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    References listed on IDEAS

    as
    1. Raymond J. Deneckere & Dan Kovenock, 1992. "Price Leadership," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 143-162.
      • Raymond Deneckere & Dan Kovenock, 1988. "Price Leadership," Discussion Papers 773, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Mark A. Satterthwaite, 1979. "Consumer Information, Equilibrium Industry Price, and the Number of Sellers," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 483-502, Autumn.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Engelmann, Dirk & Müller, Wieland, 2011. "Collusion through price ceilings? In search of a focal-point effect," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 291-302, August.

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    More about this item

    Keywords

    dental services; price leadership; reputation goods;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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