Module 2, Part 1: Introduction to Physician Agency
In part 1, we introduce the idea of physician agency and our study of physician treatment decisions. Just as asymmetric information between patients and insurance companies was a big part of the adverse selection problem, this module will show how asymmetric information between physicians and patients can also create some interesting dynamics and incentives.
Objectives
- Explain the principal-agent problem in the context of medical care
- Solve for treatment levels when physicians set prices and quantity
Activities
- In-class problem on physician agency. The worksheet is here.
Slides
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