Government Policy and the Dynamics of Market Structure: Evidence from Critical Access Hospitals,” Working paper,

Abstract This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility Program. The goal of this program is to maintain access to hospital care for rural residents. Like many other government policies, the CAH program targets the underlying supply infrastructure, in this case by providing more generous cost-plus reimbursement to rural hospitals in exchange for capacity and service limitations. The program created a new class of hospital, the Critical Access Hospital (CAH), to which rural hospitals can convert. We specify a dynamic oligopoly model of the rural hospital industry with hospital investment in capacity, exit and conversion to CAH status. We develop new methods that allow us to efficiently estimate the structural parameters and compute counterfactual equilibria. We use the methods to estimate the impact of eliminating and modifying the CAH program on access to hospitals and patient welfare. We find that ???. Our methods may be more broadly useful in estimating and computing other dynamic oligopoly games with investment in capacity

Asymmetric information, adverse selection and online disclosure: The case of eBay motors

Since George A. Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods markets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers voluntarily disclose their private information on the auction webpage. This defines a precise contract — to deliver the car shown for the closing price — which helps protect the buyer from adverse selection. I test this theory using data from eBay Motors, finding that online disclosures are important price determinants; and that disclosure costs impact both the level of disclosure and prices. ∗This is a heavily revised version of my job market paper, supported by a Rackham Predoctoral Fellowship from the University of Michigan. I would especially like to thank Pat Bajari for his support and advice on this paper. I am also grateful for comments from three anonymous referees