Free entry and social inefficiency in vertical relationships: The case of the Japanese MRI industry

• Main Authors: ONISHI, Ken, WAKAMORI, Naoki, HASHIMOTO, Chiyo, BESSHO, Shun-ichiro
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: Vertical relationship; Free entry; MRI industry; Healthcare market.; Industrial Organization
• Online Access: https://ink.library.smu.edu.sg/soe_research/2068; https://ink.library.smu.edu.sg/context/soe_research/article/3067/viewcontent/2016cf1001.pdf
• Institution: Singapore Management University

This paper quantifies the welfare consequences of the medical arms race in the context of MRI adoption. We build and estimate a model of the vertical structure of the industry where MRI manufacturers sell high- and low-quality MRIs in the upstream market, whereas medical institutions provide medical...