The Dynamics of Disease in a Regulated Vertically Differentiated Health System
University of Bologna - Department of Economics
University of Luxembourg
March 3, 2011
Quaderni DSE Working Paper No. 737
We build up a differential game to investigate the interplay between the quality of health care and the presence of an evolving disease in a duopoly where patients are heterogeneous along the income dimension. We prove unicity, stability and perfection of the open-loop Nash solution. Moreover, we identify the admissible parameter region wherein price regulation achieves the twofold objectives of ensuring cares to all patients and eradicating the disease.
Number of Pages in PDF File: 21
Keywords: health care markets, quality, dynamic games
JEL Classification: C73, H42, I11, I18, L13
Date posted: March 12, 2011
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