| Title | The Welfare Consequences of Free Entry in Vertical Relationships: The Case of the MRI Market |
| Date | October 29, 2020 (Thursday) 16:30-18:00 |
| Location | via Zoom |
| Abstract | This paper considers policy design in markets with vertical relationships by studying how upstream competition affects downstream entry and social welfare in the context of MRI adoption. We build and estimate a model where MRI manufacturers sell MRIs in the upstream market, whereas medical institutions purchase MRIs to provide medical services to patients in the downstream market. Simulation results suggest that the current free-entry policy in Japan leads to excess MRI adoption. Regulating medical institutions’ MRI adoption, taxing MRI purchases, or softening competition among MRI manufacturers would increase social welfare substantially by mitigating the business-stealing effect in the downstream market. |
| Paper | Paper File |
| Slide | |
| Note | Registration is here: https://zoom.us/meeting/register/tJErduirrjwrHNbGFSM1m4UnqNr-pQOjZdpj Once you register, you can join all the seminar talks using the same link through the semester. Please make sure you put your name and affiliation. |