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Optimal rationing within a heterogeneous population
Author(s) -
Choné Philippe,
Gauthier Stéphane
Publication year - 2017
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12220
Subject(s) - rationing , agency (philosophy) , distribution (mathematics) , government (linguistics) , population , service (business) , economics , dispersion (optics) , microeconomics , business , public economics , actuarial science , health care , marketing , medicine , economic growth , environmental health , mathematical analysis , philosophy , linguistics , physics , mathematics , optics , epistemology
A government agency delegates to a provider (hospital, medical gatekeeper, school, social worker) the decision to supply a service or treatment to individual recipients. The agency does not perfectly know the distribution of individual treatment costs in the population. The single‐crossing property is not satisfied when the uncertainty pertains to the dispersion of the distribution. We find that the provision of service should be distorted upward when the first‐best efficient number of recipients is sufficiently high.