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
We empirically examine the role of information in business-to-business bargaining between hospitals and suppliers of medical technologies. Using a new data set including all purchase orders issued by over sixteen percent of US hospitals 2009-14, and differences-in-differences identification strategies based on both timing of hospitals’ joining a benchmarking database and on new products entering the market, we find that access to information on purchasing by peer hospitals leads to reductions in prices. These reductions are concentrated among hospitals previously paying high prices relative to other hospitals and for products purchased in relatively large volumes, and we demonstrate that they are consistent with hospitals resolving asymmetric information problems between themselves and the...
|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.