Consumer Inertia and Firm Pricing in the Medicare Part D Prescription Drug Insurance Exchange

A-Tier
Journal: American Economic Journal: Economic Policy
Year: 2014
Volume: 6
Issue: 1
Pages: 38-64

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

I use the Medicare Part D prescription drug insurance market to examine the dynamics of firm interaction with consumers on an insurance exchange. Enrollment data show that consumers face switching frictions leading to inertia in plan choice, and a regression discontinuity design indicates initial defaults have persistent effects. In the absence of commitment to future prices, theory predicts firms respond to inertia by raising prices on existing enrollees, while introducing cheaper alternative plans. The complete set of enrollment

Technical Details

RePEc Handle
repec:aea:aejpol:v:6:y:2014:i:1:p:38-64
Journal Field
General
Author Count
1
Added to Database
2026-01-25