Revealing Hidden Quality of a Healthcare Provider by Constructing a Healthcare Social Networking Site
Date Issued
2016
Date
2016
Author(s)
Ho, Ho
Abstract
The issue of information asymmetry between healthcare receivers (patients) and healthcare providers has always been of great importance. One feasible way to mitigate this problem is through healthcare social networking sites, which provide a more efficient way to facilitate information sharing and quality disclosure. We examine whether healthcare social networking sites are indeed helpful for revealing the true quality of healthcare providers, though there may be false information (noise) being passed on the sites. In this study, we discuss an information asymmetry problem among a healthcare provider, a social networking platform, and a group of patients. The quality of the service provided by the healthcare provider cannot be observed by the patients and may or may not be observed by the platform owner. We develop a game-theoretic model describing the process of information exchange among patients themselves and the platform owner on a social networking site. The platform owner will decide to what extend to participate in content generation on the site. This affects the network size of the social networking site. Patients who have experienced the service will then pass positive or negative recommendations to unexperienced patients, who then update their beliefs on the healthcare provider’s quality. Finally, based on the updated beliefs, unexperienced patients will decide whether to purchase the service. We characterize the platform owner’s optimal degree of engagement and study the economic and managerial implications of it. We find that a healthcare social networking site helps reveal the true quality of a healthcare provider. Despite the fact that there may be false information (noise), the existence of the healthcare social networking site is still beneficial.
Subjects
Information asymmetry
Quality disclosure
Healthcare
Social networking sites
Network externality
Type
thesis
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ntu-105-R03725041-1.pdf
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