Presented by, Jia Xiang, Ph.D. Candidate in the Department of Economics, Pennsylvania State University
For many illnesses, patients seek advice from physicians, who signal the relative value of various treatment options. Patients then incorporate this information into their treatment decision, aware that it may reflect not just their own interests but the physicians’ as well. I characterize this interaction formally using a Bayesian persuasion framework and test the model’s main implications, using health insurance claims data for a large district in China.