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Regulating Innovation with Uncertain Quality: Information, Risk, and Access in Medical Devices / Matthew Grennan, Robert Town.
- Format:
- Book
- Author/Creator:
- Grennan, Matthew.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20981.
- NBER working paper series no. w20981
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Regulating Innovation with Uncertain Quality
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2015.
- Summary:
- We study the impact of regulating product entry and quality information requirements on an oligopoly equilibrium and consumer welfare. Product testing can reduce consumer uncertainty, but also increase entry costs and delay entry. Using variation between EU and US medical device regulations, we document patterns consistent with valuable learning from more stringent US requirements. To derive welfare implications, we pair the data with a model of supply, demand, and testing regulation. US policy is indistinguishable from the policy that maximizes total surplus in our estimated model, while the EU could benefit from more testing. "Post-market surveillance" could further increase surplus.
- Notes:
- Print version record
- February 2015.
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