TY  - JOUR
AU  - Dafny,Leemore S.
TI  - Entry Deterrence in Hospital Procedure Markets: A Simple Model of Learning-By-Doing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9871
PY  - 2003
Y2  - July 2003
UR  - http://www.nber.org/papers/w9871
L1  - http://www.nber.org/papers/w9871.pdf
N1  - Author contact info:
Leemore Dafny
Department of Management and Strategy
Kellogg School of Management
Northwestern University
2001 Sheridan Road
Evanston, IL  60208-2001
Tel: 847/467-7511
Fax: 847/467-1777
E-Mail: l-dafny@kellogg.northwestern.edu
AB  - This paper examines the strategic behavior of hospitals in one of their primary output markets: inpatient surgical procedures. High levels of learning-by-doing in surgical fields may act as a barrier to entry. I investigate whether incumbent hospitals facing prospective entry in a procedure market manipulate their procedure volumes to produce such a barrier. I derive straightforward empirical tests from a model of patient demand, procedure quality, and differentiated product competition. Using hospital data on electrophysiological studies, an invasive cardiac procedure, I find evidence of entry-deterring investment in procedure volume. These findings suggest that competitive motivations may play a role in treatment decisions.
ER  -