POLI2438 Lecture 8: Health Care Rational Choice and Game Theory Introduction
Document Summary
Alternative ii -> everybody is paying nothing at least out of pocket. Go to doc or don"t go to the doc. Explain each of the variable in the context of the problem itself. Alternative i (ffs) pay doc for any service you receive. Value: (v1-v2) must be relatively large to o set x (cost) the more serious the illness the more likely you are to pay the cost broken leg isn"t going to get much better without going to the doctor. Alternative ii (nhcs) -> no out of pocket expenses. More minor illnesses likely: likely to see more doctor visits as a result more likely to go more frequently, more patients will be seen by doctors. If doctor has some chance of improving problem, one would go. Cost: x -> 0 cost does not involve money as much. Player a (can choose "yes" or "no" row) Initial assumption: the possible outcomes are known to each side assume perfect information.
