glätzle-rützler

Anniversary Project of the Austrian National Bank for Daniela Glätzle-Rützler

The research project “Credence goods in the health care market: An experimental analysis of monitoring and feedback” of Daniela Glätzle-Rützler will be financed by the Anniversary Project of the Austrian National Bank for three years.

Anniversary Project of the Austrian National Bank for Daniela Glätzle-Rützler

The research project “Credence goods in the health care market: An experimental analysis of monitoring and feedback” of Daniela Glätzle-Rützler will be financed by the Anniversary Project of the Austrian National Bank for three years.

Many markets such as health care, repair services or financial services are characterized by information asymmetries between consumers and sellers which bear the risk of fraud on the seller’s side. For instance in the health care market patients typically cannot assess which treatment best cures their medical problem. Hence they need to trust that physicians don’t exploit their informational advantage. Therefore, these goods and services are called credence goods.

Health care expenditures account for more than 10% of the GDP in Austria and thus the health care sector represents one of the most important credence goods markets. Some empirical studies show that physicians exploit their informational advantage by providing treatments that are not necessary (e.g. Gruber et al., 1999; McGuire, 2000; Clemens and Gottlieb, 2014; Schmid, 2015). Conditions leading to a reduction in physician misbehavior have not been studied extensively so far.

This research project’s overall goal is to investigate the problems associated with credence goods in the health care market and to develop means to decrease physician misbehavior. Specifically, this project contributes to the existing experimental economics literature by employing conventional lab experiments in three novel ways. (1) We explore means to reduce physician misbehavior by (1a) investigating the effect of endogenous and exogenous monitoring and (1b) endogenous and exogenous feedback. (2) We correlate measures of personal characteristics such as social preferences, level of trust, trustworthiness and risk preferences with behavior in the credence goods market to figure out which type of subjects are prone to engage in misbehavior.

Insights of this research project will not only fundamentally enhance our understanding of behavior in health care credence goods markets but also provide policy advice on how to reduce physician misbehavior and inform the general public in the role of patients when dealing with informational asymmetries.

For this project a doctoral candidate can be employed. If you are interested, please contact Daniela Glätzle-Rützler (daniela.ruetzler@uibk.ac.at).

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