Search

We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function that specifies for any (true) distribution of utility offers in the market a possibly incorrect distribution of utility offers. If biased consumers overestimate the best offer in the market, a novel type of equilibrium may emerge in which firms make exceptionally favorable offers in order to meet biased consumers’ unreasonably high expectations, which then become partially self-fulfilling. Consequently, the presence of biased consumers may improve the welfare of all consumers. (JEL D11, D21, D83, D84)

Chimia, 77 (3), ISSN:0009-4293

Background Patients may prefer different levels of involvement in decision-making regarding their medical care which may influence their medical knowledge. Objective We investigated associations of patients’ decisional control preference (DCP) with their medical knowledge, ward round performance measures (e.g., duration, occurrence of sensitive topics), and perceived quality of care measures (e.g., trust in the healthcare team, satisfaction with hospital stay). Design This is a secondary analysis of a randomized controlled multicenter trial conducted between 2017 and 2019 at 3 Swiss teaching hospitals. Participants Adult patients that were hospitalized for inpatient care. Main Measures The primary outcome was patients’ subjective average knowledge of their medical care (rated on a visual analog scale from 0 to 100). We classified patients as active, collaborative, and passive according to the Control Preference Scale. Data collection was performed before, during, and after the ward round. Key Results Among the 761 included patients, those with a passive DCP had a similar subjective average (mean ± SD) knowledge (81.3 ± 19.4 points) compared to patients with a collaborative DCP (78.7 ± 20.3 points) and active DCP (81.3 ± 21.5 points), p = 0.25. Regarding patients’ trust in physicians and nurses, we found that patients with an active vs. passive DCP reported significantly less trust in physicians (adjusted difference, − 5.08 [95% CI, − 8.69 to − 1.48 points], p = 0.006) and in nurses (adjusted difference, − 3.41 [95% CI, − 6.51 to − 0.31 points], p = 0.031). Also, patients with an active vs. passive DCP were significantly less satisfied with their hospital stay (adjusted difference, − 7.17 [95% CI, − 11.01 to − 3.34 points], p < 0.001). Conclusion Patients with active DCP have lower trust in the healthcare team and lower overall satisfaction despite similar perceived medical knowledge. The knowledge of a patient’s DCP may help to individualize patient-centered care. A personalized approach may improve the patient-physician relationship and increase patients’ satisfaction with medical care. Trial Registration ClinicalTrials.gov (NCT03210987).

We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function which specifies for any (true) distribution of utility offers in the market a possibly incorrect distribution of utility offers. If biased consumers overestimate the best offer in the market, a novel type of equilibrium may emerge in which firms make exceptionally favourable offers in order to meet biased consumers' unreasonable high expectations which then become partially self-fulfilling. Consequently, the presence of biased consumers may improve the welfare of all consumers.