Question
Recall Ken Arrow's Seminal paper Uncertainty and the Welfare Economics of Medical Care. a) Explain why health care is an experience good. (2 points) b)
Recall Ken Arrow's Seminal paper "Uncertainty and the Welfare Economics of Medical Care".
a)Explain why health care is an experience good. (2 points)
b)According to Arrow's Darwinian view about market evolution, how did "Marcus Welby Medicine" help serve patients' interests during the 1970s/1980s? (2 points)
c)The idea that "experts make recommendations on behalf of their clients and may exploit their superior knowledge to their own advantages" is not unique to medical care. Lawyers, financial consultants, real estate agents and even plumbers also make recommendations. According to Arrow's paper, what distinguishes doctors from plumbers and professionals in other expert service markets?
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