Bayesian Nash Equilibrium Analysis of Medical Market under Asymmetry Information

Medical market is in highly asymmetric information and heterogeneity so that the task to identify the quality of physicians' medical service is difficult. Physicians can easily snatch information rent with dominance of information, which lowers the efficiency of medical market A static Bayesian game model between physician and patient is developed to analyze the medical market efficiency. The results indicate that there is no medical service trade on the market, if the patients' estimate of the graveness degree of their illness state is at a lower level or the physicians' estimate of the graveness degree of the patient's illness state is at a higher level. Therefore, the information asymmetry between physician and patient induces the lower efficiency on the medical market, and the patient's health is at a higher risk. In order to enhance the efficiency of the medical market, the degree of the information asymmetry should be reduced. Some measures can be taken as follows: first, consummate the medical information publicity system; second, strengthen hospitals' information construction; third, develop E-medical record information system; forth, develop self-diagnosis system for patient; and fifth, develop healthcare system for household.