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The Dynamics of Disease in a Regulated Vertically Differentiated Health System

Quaderni DSE Working Paper No. 737

21 Pages Posted: 12 Mar 2011  

Luca Lambertini

University of Bologna - Department of Economics

Alessandro Tampieri

University of Luxembourg

Date Written: March 3, 2011

Abstract

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.

Keywords: health care markets, quality, dynamic games

JEL Classification: C73, H42, I11, I18, L13

Suggested Citation

Lambertini, Luca and Tampieri, Alessandro, The Dynamics of Disease in a Regulated Vertically Differentiated Health System (March 3, 2011). Quaderni DSE Working Paper No. 737. Available at SSRN: https://ssrn.com/abstract=1782705 or http://dx.doi.org/10.2139/ssrn.1782705

Luca Lambertini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 051 2092600 (Phone)
+39 051 2092664 (Fax)

Alessandro Tampieri

University of Luxembourg ( email )

Avenue de la Faïencerie
162a
Luxembourg City, Luxembourg L-1511
Luxembourg

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