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Nursing‐homes' competition and distributional implications when the market is two‐sided
Author(s) -
Bardey David,
Siciliani Luigi
Publication year - 2021
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12415
Subject(s) - competition (biology) , nursing homes , reservation , market competition , nursing , key (lock) , business , labour economics , economics , demographic economics , medicine , market economy , political science , ecology , law , biology
We investigate the effect of competition in the nursing‐homes sector with a two‐sided market approach. Using a Hotelling model, our key findings are that (i) the two‐sidedness of the market leads to higher wages for nurses, (ii) this is then passed to residents in the form of higher prices, and (iii) nursing‐homes profits are instead unaffected. In contrast, when nurses wages are regulated, the two‐sidedness of the market implies a transfer between residents and nursing homes. When residents' price is regulated, it implies a transfer between nurses and nursing homes. These key results are generally robust to institutional settings which employ pay‐for‐performance schemes, the presence of altruistic motives of nursing homes and the heterogeneity in residents reservation utility.