Economics Department Seminarhttps://weatherhead.case.edu/events/2013/09/19/economics-department-seminarPlease join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research. Abstract is below.
Contact Information:
Teresa Kabat
teresa.kabat@case.edu
216.368.4110
Standardization of complex products is touted as improving consumer decisions
and intensifying price competition, but evidence on standardization is limited. We
examine a natural experiment with health insurance plans on the Massachusetts Health
Insurance Exchange. Pre-standardization, ?rms had wide latitude to design plans. A
regulatory change then required ?rms to standardize the cost-sharing parameters of
plans and o¤er seven de?ned options; plans remained di¤erentiated on network, brand,
and price. Post-standardization, consumers shifted to relatively more generous health
insurance plans. A discrete choice model shows that this shift is explained by changes
in consumer valuation of plan attributes, rather than changes in product availability.
Standardization increased welfare in our models, but counterfactual exercises show
that ?rms captured some of the surplus by reoptimizing premiums. Finally, we use
hypothetical choice experiments to replicate the e¤ect of standardization and conduct
alternative counterfactuals.
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Thursday, Sep. 19, 2013 from 4:15 p.m. to 5:45 p.m. |
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Peter B. Lewis Building, Room 202 11119 Bellflower Road
Cleveland, OH 44106-7235 United States
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Speaker(s): Amanda Starc, Ph.D., Wharton School, University of Pennsylvania |
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Sponsored by: Economics Department |
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