The Optimal Provision of Curative Goods

We analyze the optimal contract between a risk neutral regulator providing a curative goods and a risk averse patient who learns the realized value of his/her health status after the contracting stage. Consumption of a curative good (healthcare) reduces the disutility associated with a disease. We show that the consumption of curative goods is larger than in the complete information case, that this overprovision increases with the degree of patients’ risk‐aversion and the marginal cost of treatment. Ceilings on the amount of healthcare are part of the optimal contract when risk aversion is important.     

Market Games in Successive Oligopolies

This paper introduces a new approach to successive oligopolies. We draw on market games à la Shapley–Shubik to examine how successive oligopolies operate between downstream and upstream markets when the input price is determined by the action of all firms, downstream and upstream both. This approach differs from the classical one as it allows us to consider downstream firms that exercise market power both in both downstream and upstream markets. We perform a comparison of the market outcome with each scenarios as well as a welfare analysis.