AbstractAgency problems are a defining characteristic of healthcare markets. We present the results from a field experiment in the market for dental care: a test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary the socio-economic status of the patient and whether a second opinion signal is sent. Furthermore, measures of market, practice and dentist characteristics are collected. We observe an overtreatment recommendation rate of 28% and a striking heterogeneity in treatment recommendations. Furthermore, we find significantly fewer overtreatment recommendations for patients with higher socio-economic status compared with lower socio-economic status for standard visits, suggesting a complex role for patients’ socio-economic status. Competition intensity, measured by dentist density, does not have a significant influence on overtreatment. Dentists with shorter waiting times are more likely to propose unnecessary treatment.
Earthquakes are among the most catastrophic natural disasters. Existing buildings constructed in earthquake prone locations prior to 1970s generally do not meet the criteria of modern seismic design codes. Structural seismic upgrading is a very effective strategy to mitigate the earthquake risk for existing structures. However, in many cases, seismic upgrade design is criticized as overly conservative resulting in expensive structural interventions. The present study proposes a framework that combines key elements of the performance-based seismic design with the actuarial “frequency-severity” method to perform a cost-benefit analysis of structural seismic upgrading. A curve that quantifies the avoided losses and casualties for different levels of partial seismic upgrade at the site of interest is introduced. This curve provides a tool that enables engineers to optimize rapidly, at a preliminary design level, the seismic upgrading strategy using a cost-benefit analysis. The proposed framework is applied to existing residential buildings located in two different seismic hazard environments, namely Zurich (Switzerland) and L'Aquila (Italy), to identify the optimal seismic upgrading level.
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