Michael J. Doane

How Well Do Travel Cost Models Measure Competition Among Hospitals

Health plans create competition among hospitals by threatening to “steer” patients to preferred facilities. Mergers can reduce this competition and economists have begun using travel cost demand models to predict their effects. In this paper, we document an anomaly in estimation: for any plausible estimate of the opportunity cost of time, the price of hospital service is several orders of magnitude larger than the estimated value that patients place on the service. This anomaly raises questions about how well travel cost models measure demand for medical care, competition among hospitals, and the increase in bargaining power created by merger.

Predicting Price Effects from Retail Mergers

We propose a simple method for predicting price effects from mergers between branded retail chains competing in many local markets. When past mergers created markets with the same number of brands but different numbers of brand owners, price data at a single point in time exhibit between-market variation much like the variation over time from mergers. We construct an estimator isolating this between-market variation and use it to predict price effects from mergers in the car rental industry.

Economic Issues in U.S. v. Microsoft

This paper discusses the economic issues involved in the governments case against Microsoft. In particular, we examine the competitive effects of Microsofts contractual restrictions, including the bundling of its Internet browser with the Windows 98 operating system in agreements with computer manufacturers (also called Original Equipment Manufacturers or OEMs), online services providers (OLS), Internet service providers (ISP) and Internet content providers (ICP). A secondary purpose is to review and critique the economic evidence presented by Microsoft in support of its contention that its behavior is not characteristic of a monopoly.