Ruhr Economic Papers

Ruhr Economic Papers #507

Altruism Heterogeneity and Quality Competition Among Healthcare Providers

by Nadja Kairies-Schwarz

UDE, 10/2014, 29 S./p., 8 Euro, ISBN 978-3-86788-582-9 DOI: 10.4419/86788582



New empirical evidence shows substantial heterogeneity in the altruism of healthcare providers. Spurred by this evidence, we build a spatial quality competition model with altruism heterogeneity. We find that more altruistic healthcare providers supply relatively higher quality levels and position themselves closer to the center. Whether the social planner prefers more or less horizontal differentiation is in general ambiguous and depends on the level of altruism. The more altruistic healthcare providers are, the more likely it is that the social planner prefers greater horizontal differentiation to offset costly quality competition.

JEL-Classification: H42, I11, I18, L13

Keywords: healthcare provider altruism and heterogeneity; quality competition