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Professional Partnerships And Matching In Obstetrics

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Executive Summary

This paper indicates that internally-differentiated professional partnerships can promote matching between heterogeneous consumers and professionals, particularly when consumers have imperfect information or markets have barriers to referrals between firms. The authors test this in obstetrics markets, relying on random assignment of patients to physicians to generate unbiased measures of a physician's treatment style and skill, and on simulations to measure a physician's specialization. Consumers match to professionals along all three dimensions - specialization, style and skill - based on consumers' observed characteristics and unobserved preferences. They conclude that internally-differentiated partnerships promote matching in ways that improve consumers' welfare and health.

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