Quality and Welfare in a Mixed Duopoly with Regulated Prices: The Case of a Public and a Private Hospital

摘要: Abstract. Hospital markets are often characterized by price regulation and the existence of different ownership types. Using a Hotelling framework, this paper analyses effect heterogeneous objectives hospitals on quality differentiation, profits overall welfare in price-regulated duopoly with exogenous symmetric locations. In contrast to other studies mixed duopolies, shows that, privatization public hospital may increase welfare. This holds if is similar private or less efficient competition low. The main driving force single-regulated which induces under-provision (over-provision) more (less) compared first best. However, sufficiently fierce, outperforms both due an equilibrium below (above) (public) duopoly. medium discourages over-provision – together non-profit objective encourages hospital.