Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to understand how the effect of such reforms depends on the intensity of local competition. We build a nonprice competition model to examine the...

This paper studies the welfare consequences of a vertical merger that raises rivals' costs when downstream competition is à la Cournot between firms with constant asymmetric marginal costs. The main result is that such a vertical merger can nevertheless improve welfare if it involves a...