Matthew R. Grennan
The Wharton School
University of Pennsylvania
3641 Locust Walk
Philadelphia, PA 19104
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
NBER Working Papers and Publications
|February 2016||Transparency and Negotiated Prices: The Value of Information in Hospital-Supplier Bargaining|
with Ashley Swanson: w22039
Using a detailed dataset of hospitals' purchase orders, we find that information on purchasing by peer hospitals leads to reductions in the prices hospitals negotiate for supplies. Identification is based on staggered access to information across hospitals over time. Within coronary stents, reductions are concentrated among hospitals previously paying relatively high prices and for brands purchased in large volumes, and are consistent with resolving asymmetric information problems. Estimates across a large number of other important product categories indicate that the effects of information are largest in both absolute and relative terms for physician preference items (PPIs). Among PPIs, high-price, high-quantity hospital-brand combinations average 3.9 percent savings, versus 1.6 percent f...
|February 2015||Regulating Innovation with Uncertain Quality: Information, Risk, and Access in Medical Devices|
with Robert Town: w20981
We propose a model where new product quality is uncertain, but market participants learn over time. Regulation balances information's role in reducing consumer risk versus reducing access to innovation. Using new data and variation between EU and US medical device regulations, we document patterns consistent with the model and estimate its parameters. We find: (1) without information from testing, risk would severely inhibit usage; (2) US policy maximizes total surplus in our estimated model while the EU could gain 20 percent with more pre-market testing; and (3) more “post- market surveillance” could increase surplus 24 percent.