Showing 1 - 2 of 2 Items
Digital Market Concentration: An Institutional and Social Cost Analysis
Date: 2022-01-01
Creator: Jack Shane
Access: Open access
- In this thesis, I develop an analysis of the industry concentration seen in digital markets today. I begin with a description and argument for the use of institutional economics. This framework allows for the integration of an interdisciplinary approach to economics. My analysis details the socioeconomic and political impacts, as well as the underlying market dynamics that have pushed digital markets towards concentration. I offer novel explanations for the lack of firm behavior that should theoretically increase profit, the existence of barriers to competition, and consumer behavior that focus on the role of social institutions. I also detail many of the social costs of these concentrated markets, such as their impact on democracy, power to influence social institutions, and the impact they have on concentration in other markets. This is done to show that the fears surrounding monopolies do not end with prices. Even in digital markets, where many times prices are very low, if not zero, there are reasons that monopoly is economically inefficient and socially sub-optimal. However, due to the path-dependent nature of the extreme benefits associated with digital markets, policymakers cannot reasonably propose breaking up these companies. Instead, they must use the power of the government to counteract the conglomerations of social power seen in these private companies in search of an optimal outcome.
The Role of Competition and Patient Travel in Hospital Profits: Why Health Insurers Should Subsidize Patient Travel
Date: 2013-05-01
Creator: Joseph S Durgin
Access: Open access
- This paper explores the effects of patient travel distance on hospital profit margins, with consideration to the effects of travel subsidies on hospital pricing. We develop a model in which hospital agglomeration leads to a negative relationship between profit margins and patient travel distance, challenging the standard IO theory that profit margins are higher for firms with greater distances of customer travel. Using data on patient visits and hospital finances from the California Office of Statewide Health Planning and Development (OSHPD), we test our theory and confirm that a hospital tends to have less pricing power if it draws patients from beyond its local cluster. We then consider how our results might justify the subsidizing of patient travel by insurers and government payers. Lastly, we present an argument for why the ubiquitous Hirschman-Herfindahl index of market concentration can be robust to owner and system-level hospital cooperation.