Michael L. Powell

Kellogg School of Management
2211 Campus Drive
Evanston, IL 60208
Tel: 847-491-8676

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Northwestern University

NBER Working Papers and Publications

February 2017Sticking Points: Common-Agency Problems and Contracting in the U.S. Healthcare System
with Brigham Frandsen, James B. Rebitzer: w23177
We propose a "common-agency" model for explaining inefficient contracting in the U.S. healthcare system. In our setting, common-agency problems arise when multiple payers seek to motivate a shared provider to invest in improved care coordination. Our approach differs from other common-agency models in that we analyze "sticking points," that is, equilibria in which payers coordinate around Pareto-dominated contracts that do not offer providers incentives to implement efficient investments. These sticking points offer a straightforward explanation for three long observed but hard to explain features of the U.S. healthcare system: the ubiquity of fee-for-service contracting arrangements outside of Medicare; problematic care coordination; and the historic reliance on small, single specialty pr...

Published: Brigham Frandsen & Michael Powell & James B. Rebitzer, 2019. "Sticking points: common‚Äźagency problems and contracting in the US healthcare system," The RAND Journal of Economics, vol 50(2), pages 251-285. citation courtesy of

February 2010Rational-Expectations Equilibrium in Intermediate Good Markets
with Robert S. Gibbons, Richard T. Holden: w15783
We analyze a rational-expectations model of information acquisition and price formation in an intermediate- good market: prices and net supply are non-negative, there are no noise traders, and the intermediate good has multiple potential uses. Several of our results differ from the classic Grossman-Stiglitz approach. For example, the price mechanism is more informative at high and low prices and potentially uninformative at middle prices. Also, an informed trade by a producer of one final good amounts to a noise trade from the perspective of a producer of another final good, so (a) as the price mechanism becomes more informative for producers of one final good, it becomes less informative for producers of others, who therefore have a stronger incentive to acquire information, so informatio...
Integration and Information: Markets and Hierarchies Revisited
with Robert S. Gibbons, Richard T. Holden: w15779
We analyze a rational-expectations model of price formation in an intermediate-good market under uncertainty. There is a continuum of dyads, each consisting of an upstream party and a downstream party. Both parties can make specific investments at private cost, and there is a machine that either party can own. As in property-rights models, different ownership structures create different incentives for the parties' investments. As in rational-expectations models, some parties may invest in acquiring information, which is then incorporated into the market-clearing price by the parties' trading behaviors. The informativeness of the price mechanism affects the returns to specific investments and hence the optimal ownership structure for individual dyads; meanwhile, the ownership choices by ind...
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