Regulating Innovation with Uncertain Quality: Information, Risk, and Access in Medical Devices

• 成果类型: Article
• 署名作者: Grennan, Matthew; Town, Robert J.
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; University of Texas System; University of Texas Austin
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20180946
• 发表日期: 2020
• 页码: 120-161
• 关键词: empirical-evidence; health-insurance; Price controls; DRUG; CHOICE; MARKET; entry; preferences; PRODUCTS; DYNAMICS

摘要

We study the impact of regulating product entry and quality information requirements on an oligopoly equilibrium and consumer welfare. Product testing can reduce consumer uncertainty, but also increase entry costs and delay entry. Using variation between EU and US medical device regulations, we document patterns consistent with valuable learning from more stringent US requirements. To derive welfare implications, we pair the data with a model of supply, demand, and testing regulation. US policy is indistinguishable from the policy that maximizes total surplus in our estimated model, while the European Union could benefit from more testing. Post-market surveillance could further increase surplus.