Competition and altruism: Experimental evidence

Incentives and competition have been the subject of many theoretical and empirical studies. There is, however, scarce empirical evidence on how individuals’ degree of altruism relates to the individuals’ responsiveness to changes in the competition intensity in a market. In this paper, we separate physician altruism from the effects that changes in the competitive intensity have on the choice of health care quality by means of data from a laboratory experiment. Our new experimental design changes the competitive intensity at an individual within-subject level, and also varies physicians' payments and costs, as well as patients' benefits. We then elicit subject-specific physician altruism variations by means of multilevel ordinal regression models. To the best of our knowledge, this is the first experimental study on how the effects of incentives and market competition on health care quality relate to altruism.