Simulating Hospital Merger Simulations*

2023/03/01 by David J. Balan, Keith Brand · 1 citation
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Market Behavior and Pricing #Healthcare Policy and Management #Merger and Competition Analysis

paper · pdf · doi:10.1111/joie.12312

openalex publication_date 2023/03/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/22

Abstract

We perform a Monte Carlo experiment to assess the performance of three hospital merger simulation methods. Our analysis proceeds as follows: (i) specify a theoretical model of hospital markets and use it to generate “true” price effects for many simulated mergers; (ii) for each simulated merger, generate data of the kind commonly available in real‐world merger analysis and apply the simulation methods to those data; and (iii) compare the predictions of the simulation methods to the true price effects. All three simulation methods perform reasonably well. We also develop a method for predicting price effects that extends Garmon [2017].

Citations

• “Nash-in-Nash” Bargaining: A Microfoundation for Applied Work
• The Industrial Organization of Health-Care Markets

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