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Input Constraints and the Efficiency of Entry: Lessons from Cardiac Surgery / David M. Cutler, Robert S. Huckman, Jonathan T. Kolstad.
- Format:
- Book
- Author/Creator:
- Cutler, David M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15214.
- NBER working paper series no. w15214
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Input Constraints and the Efficiency of Entry
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2009.
- Summary:
- Prior studies suggest that, with elastically supplied inputs, free entry may lead to an inefficiently high number of firms in equilibrium. Under input scarcity, however, the welfare loss from free entry is reduced. Further, free entry may increase use of high-quality inputs, as oligopolistic firms underuse these inputs when entry is constrained. We assess these predictions by examining how the 1996 repeal of certificate-of-need (CON) legislation in Pennsylvania affected the market for cardiac surgery in the state. We show that entry led to a redistribution of surgeries to higher-quality surgeons and that this entry was approximately welfare neutral.
- Notes:
- Print version record
- August 2009.
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