Altruism Heterogeneity and Quality Competition Among Healthcare Providers

New empirical evidence shows substantial heterogeneity in the altruism of healthcare providers. Spurred by this evidence, we build a spatial quality competition model with altruism heterogeneity. We fi nd that more altruistic healthcare providers supply relatively higher quality levels and position themselves closer to the center. Whether the social planner prefers more or less horizontal diff erentiation is in general ambiguous and depends on the level of altruism. The more altruistic healthcare providers are, the more likely it is that the social planner prefers greater horizontal diff erentiation to off set costly quality competition. JEL Classifi cation: H42, I11, I18, L13