Hospital Mergers with Regulated Prices

Kurt R. Brekke, Luigi Siciliani, Odd Rune Straume

Research output: Contribution to journalArticlepeer-review


We study the effects of a hospital merger in a spatial competition framework where semi-altruistic hospitals choose quality and cost-containment effort. Whereas a merger always leads to higher average cost efficiency, the effect on quality provision depends on the strategic nature of quality competition, which in turn depends on the degree of altruism and the effectiveness of cost-containment effort. If qualities are strategic complements, then a merger leads to lower quality for all hospitals. If qualities are strategic substitutes, then a merger leads to higher quality for at least one hospital, and might also yield higher average quality provision and increased patient utility.

Original languageEnglish
Pages (from-to)597–627
Number of pages31
JournalScandinavian Journal of Economics
Issue number3
Early online date16 May 2017
Publication statusPublished - 29 Jun 2017

Bibliographical note

Date of Acceptance: 09/12/2015. Embargo period: 24 months. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details


  • Antitrust
  • I11
  • I18
  • L13
  • L44
  • cost efficiency
  • hospital mergers
  • quality competition

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