ABSTRACT
This chapter identifies how doctors choose to locate their medical practices in a special equilibrium. It deals with the most general long-run question confronting doctors: Where should a practice be located? The answer to this question not only contains important economic information but also represents a longstanding issue in public policy. The chapter deals with the second question, the intermediate-run process by which individual patients and doctors are matched with one another. This process of search and matching of doctors and patients plays a prominent role in how well the market functions in matters of medical care and health. The third question centers on the interaction of physicians and patients and the role of information in that interaction. These three questions form the basis for our discussion of physicians in the marketplace. The chapter discusses the long-run decision of geographic location, continue to the shorter-run question of matching patients and doctors, and conclude with the question of demand inducement.
