Home Yijuan Chen, School of Economics, Australian National University
Research
1. Why Are Health Care Report Cards So Bad (Good)?, First Version 2008-11, Latest Version: 2009-10, Available upon Request
Abstract: I provide a signaling-game theoretical
foundation, upon which a new empirical framework is proposed, to study the
effects of issuing quality report cards for health care providers. I find that,
when patients and providers are matched randomly, multidimensional measures in
the existing report cards render them the optimal mechanism that reveals the
provider types without causing providers to select patients. However, asymmetric
distributions of patient types between providers, caused by the referring
physician, may force the high-quality provider to shun patients in order to
signal himself. Despite this imperfection, the existing report cards cause the
minimum selection compared with alternative report mechanisms.
In contrast to prior research, my results imply
that a traditional single difference-in-differences estimate is not sufficient
to indicate providers' selection behavior, and cannot capture the report cards'
long run welfare effect with short run data. In my new empirical framework, a
treatment effect will be estimated once every period. More broadly, my study can
be extended and applied to other industries with experts, such as automobile
service, law and education.
2. Character Evidence and Regulation of Skilled Experts, 2008, Available upon Request
Abstract: Using a repeated-game model, I show that prohibition of "character evidence" in the evidence law will lead to a tacit collusion, in form of providing perjury, between producers who are skilled experts. In the context of health care, in equilibrium such collusion results in not only medical malpractice from the providers but also no litigation from the patients.
3. Word-of-mouth in Movies with Platform Release: Theory and Evidence, 2007, Joint with Qiang Pan, Available upon Request
Abstract: We study the word-of-mouth effect on movies with platform release, a common marketing strategy in the motion picture industry. We construct a theoretical model which shows that the word-of-mouth effect together with a sliding-percentage contract between the movie distributor and exhibitors gives rise to the usage of platform release. Using the data in the U.S. motion picture industry from 2000 to 2005, we quantify the word-of-mouth scales and estimate the information transmission process in the movies featuring platform release.
4. Dynamic Innovation of Durable Complementary Goods, 2006, Available upon Request
Abstract: In an infinite-horizon continuous-time setting, by decomposing a durable good into a software part and a hardware part, I extend the dynamic monopolistic innovation problem in previous literature to a duopoly. I show that, when fixed costs are sufficiently high, the firms may innovate more frequently than the social planner, which is in contrast to not only the conclusion from the monopolistic setting but also a familiar result from the network-externality literature, and thus provides a caution for policy makers.