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The Preventive and Treatment

Linfeng Chen

出版	SSRN, 2019
URL	http://books.google.com.hk/books?id=ktX6zgEACAAJ&hl=&source=gbs_api

註釋

The preventives are taken before getting ill, while the treatments are taken after getting ill. We consider the equilibrium decision of competitive firms to offer the preventive or the treatment and the inefficiency. We show that the profit of the preventive firm could be higher than the treatment firm under certain conditions. For the homogenous model, there is one symmetric pure strategy equilibrium and one mixed strategy equilibrium. For the Hotelling model, there could be different equilibria with different equilibrium decision of the preventive or treatment. The equilibrium could be that both firms offer the preventive or both firms offer the treatment. Moreover, we characterize the equilibrium efficacy decision of firms. Social welfare comparison is performed. Inefficiency and government regulation guidance is provided. Further, we consider the R&D and the side effects of the preventive and treatment. To the best of our knowledge, we are the first to consider these competitive economic effects of the preventive and treatment.