There is considerable controversy about what causes (in)effectiveness of physician performance pay in improving the quality of care. Using a behavioral experiment with German primary-care physicians, we study the incentive effect of performance pay on service provision and quality of care. To explore whether variations in quality are based on the incentive scheme and the interplay with physicians' real-world profit orientation and patient-regarding motivations, we link administrative data on practice characteristics and survey data on physicians' attitudes with experimental data. We find that, under performance pay, quality increases by about 7pp compared to baseline capitation. While the effect increases with the severity of illness, the bonus level does not significantly affect the quality of care. Data linkage indicates that primary-care physicians in high-profit practices provide a lower quality of care. Physicians' other-regarding motivations and attitudes are significant drivers of high treatment quality.

We study how competition between physicians affects the provision of medical care. In our theoretical model, physicians are faced with a heterogeneous patient population, in which patients systematically vary with regard to both their responsiveness to the provided quality of care and their state of health. We test the behavioral predictions derived from this model in a controlled laboratory experiment. In line with the model, we observe that competition significantly improves patient benefits as long as patients are able to respond to the quality provided. For those patients, who are not able to choose a physician, competition even decreases the patient benefit compared to a situation without competition. This decrease is in contrast to our theoretical prediction implying no change in benefits for passive patients. Deviations from patient‐optimal treatment are highest for passive patients in need of a low quantity of medical services. With repetition, both, the positive effects of competition for active patients as well as the negative effects of competition for passive patients become more pronounced. Our results imply that competition can not only improve but also worsen patient outcome and that patients' responsiveness to quality is decisive.

We examine the impact of framing on individuals' risk-taking behavior in the context of health risks during the coronavirus outbreak. We elicit risk attitudes from a sample of 3385 individuals across seven European countries using an incentivized decision-making task. Participants are randomly assigned to one of three versions of the task: one involving the risk of a bomb explosion, one involving the risk of contracting an infectious disease, and one involving opening an empty box. We find that the framing of the task significantly affects risk-taking behavior, with participants exhibiting greater risk aversion in the health task than in the bomb or neutral task. This framing effect is observed in the majority of the countries studied. (c) 2023 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by- nc- nd/4.0/).

We investigate heterogeneity in health insurance choice using data from a controlled laboratory experiment. Participants make consecutive choices from sets of insurance plans that vary in premium, deductible, and complementary coverage of illnesses. We find that there is considerable heterogeneity in how much individuals are willing to pay for certain plan attributes. To better understand these differences, we account for individual risk preferences using a rank‐dependent expected utility (RDEU) model and assess the welfare effects of plan choices. At the aggregate level, we find welfare losses under both the normative RDEU model and the descriptive EV model. At the individual level, however, the results are more differentiated: for some individuals, choices are consistent with their RDEU preferences, whereas for others, choices do not fit either model, suggesting either decision errors or reliance on heuristics.