A Quality of Care Service on Qualitatively Competitive Market with Asymmetric Information and under a Fixed Price

—Effects of Raising Fees，Enhancing Regulation and Relaxing Manpower Constraint—

Abstract

The purpose of our research is to investigate whether providers produce high or low quality service in the Japanese care service market. Though the Japanese Care Insurance has a kind of quasi-market，providers are subject to a fixed price system and consumers are faced with imperfect information about suppliers. Under these market conditions，we find that providers can put high quality on their service by adapting a higher fixed price for service, by regulating quality norm, or by educating consumers. We also confirm these results by economic experiments.