Countervailing Market Power and Consumer Surplus: An Empirical Examination

J. Ale-Chilet; Juan Pablo Atal

doi:10.1257/pandp.20201012

Countervailing Market Power and Consumer Surplus: An Empirical Examination

J. Ale-Chilet, Juan Pablo Atal

Department of Economics

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

Abstract

A current debate in antitrusts analyzes whether to allow horizontal agreements that counteract large imbalances of power in vertical negotiations. We leverage detailed data to empirically assess the consequences for patients of a recent case in which a group of physicians in Chile formed a trade association to improve their bargaining position with insurers. As a result of this agreement, out-of-pocket costs increased by 160 percent. Overall, we find large decreases in consumer surplus.

Original language	American English
Title of host publication	AEA Papers and Proceedings
Editors	William R. Johnson, Ginny Herbert
Publisher	American Economic Association
Pages	579-583
Number of pages	5
Volume	110
DOIs	https://doi.org/10.1257/pandp.20201012
State	Published - 2020

Bibliographical note

Place of conference:San Diego, USA
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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10.1257/pandp.20201012

Cite this

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abstract = "A current debate in antitrusts analyzes whether to allow horizontal agreements that counteract large imbalances of power in vertical negotiations. We leverage detailed data to empirically assess the consequences for patients of a recent case in which a group of physicians in Chile formed a trade association to improve their bargaining position with insurers. As a result of this agreement, out-of-pocket costs increased by 160 percent. Overall, we find large decreases in consumer surplus.",

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Countervailing Market Power and Consumer Surplus: An Empirical Examination

Abstract

Bibliographical note

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