School of Economics

  Invites you to a

Microeconometrics & Public Policy seminar presented by

Albert Ma

(Boston University)

Antibiotic Resistance, Drug Prices, and Entry

Co-author

Miaoqing Jia (Model Risk Management Group)

Friday, 25 August 2023

12.00pm – 1.00pm 

Seminar Room 650 – Level 6

A02 Social Sciences Building

Camperdown Campus
The University of Sydney NSW 2006

Antibiotic drug resistance is modeled by an increase in future drug cost (or equivalently a decrease in drug quality) due to current consumption. Competition in the medicine market leads to maximum consumption, and results in inefficiency. Free riding is the rationale behind the market failure; a single consumer cannot affect future drug cost, so might as well choose to consume. Drug plans with a centralized way to ration medicine can alleviate free riding. A monopoly will dampen the market failure because it internalizes cost increase. However, a monopoly may not benefit consumers because of high prices. If innovation is possible, a potential entrant must consider competing with an incumbent upon entry. Under Cournot competition, entry deterence occurs when the incumbent restricts consumption to reduce its own future cost so the entrant cannot earn enough. Entry deterence by the incumbent can result although there is no uncertainty. Policies that are favorable for entry are considered.

For further information contact: Microeconometrics & Public Policy Seminar Coordinator
Dr Gregor Pfeifer & Dr Rebecca McKibbin

For all upcoming seminars in School of Economics see Our events and Calendar