Medical Insurance and Free Choice of Physician Shape Patient Overtreatment. A Laboratory Experiment

==Noted by yinung==


Date: 2014-09-30
By: Steffen Huck (Wissenschaftszentrum Berlin für Sozialforschung (WZB))
Gabriele Lünser (University College London – Centre for Economic Learning and Social Evolution (ELSE))
Florian Spitzer (Department of Economics, Vienna Center for Experimental Economics (VCEE), University of Vienna)
Jean-Robert Tyran (Department of Economics, Copenhagen University)
In a laboratory experiment designed to capture key aspects of the interaction between physicians and patients in a stylized way, we study the effects of medical insurance and competition in the guise of free choice of physician. Medical treatment is an example of a credence good: only the physician (but not the patient) knows the appropriate treatment, and even after consulting, the patient is not sure whether he got proper treatment or got an unnecessary treatment, i.e. was overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insurance: most patients seek treatment, but overtreatment is moderated.
Keywords: Credence good, Patient, Physician, Overtreatment, Competition, Insurance, Moral hazard
JEL: C91 I11 I13

Loss Aversion, Stochastic Compensation, and Team Incentives

Date: 2013-07
By: Kohei Daido (School of Economics, Kwansei Gakuin University)
Takeshi Murooka (Department of Economics, University of California, Berkeley)
We investigate moral-hazard problems with limited liability where agents have expectation-based reference-dependent preferences. We show that stochastic compensation for low performance can be optimal. Because of loss aversion, the agents have first-order risk aversion to wage uncertainty. This causes the agents to work harder when their low performance is stochastically compensated. We also examine team incentives for credibly employing such stochastic compensation. In an optimal contract, low- and high-performance agents are equally rewarded if most agents achieve high performance. Team incentives can be optimal even when there are only two agents and the degree of loss aversion is not large.
Keywords: Moral Hazard, Loss Aversion, Stochastic Compensation, Team Incentives,Reference-Dependent Preferences
JEL: D03

有關 moral hazard and adverse selection 的實驗文獻


Keser, C., & Willinger, M. (2002). Experiments on moral hazard and incentives: Reciprocity and surplus sharing. The Economics of Contracts: Theories and Applications, 293-312.

Testing for adverse selection in insurance markets

Cohen, A., & Siegelman, P. (2010). Testing for adverse selection in insurance markets. Journal of Risk and Insurance, 77(1), 39-84. 提供的 [PDF]
這一篇是回顧實證文獻, 有含 natural experiments 或 randomized experiments, 例如 RAND Health Insurance Experiment

A Model of Moral Hazard with Inequity Aversion: An Experimental Test

Chernomaz, K. (2011). A Model of Moral Hazard with Inequity Aversion: An Experimental Test. Available at SSRN 1801006.

An experimental study of insurance decisions

Schoemaker, P. J., & Kunreuther, H. C. (1979). An experimental study of insurance decisions. Journal of Risk and Insurance, 603-618.

Exaggerated risk: Prospect theory and probability weighting in risky choice.

Kusev, P., van Schaik, P., Ayton, P., Dent, J., & Chater, N. (2009). Exaggerated risk: Prospect theory and probability weighting in risky choice. Journal of Experimental Psychology: Learning, Memory, and Cognition, 35(6), 1487.

Repeated moral hazard and contracts with memory: A laboratory experiment

Date: 2011-02
By: Nieken, Petra
Schmitz, Patrick W
This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals may prefer to offer contracts with memory.
Keywords: Laboratory experiment; Repeated moral hazard; Sequential hidden actions
JEL: D82