Abstract

In this study, we discuss an information asymmetry problem between a healthcare provider and consumers, and examine the strategy for a platform owner to mitigate this problem. Because the Internet has become a major media for healthcare information sharing, we believe that social networking sites may mitigate the problem of information asymmetry by providing a more efficient way to facilitate information sharing and quality disclosure. We develop a game-theoretic model describing the process of information exchange among healthcare consumers themselves and the platform on a social networking site. We show that this “strategy” of engaging in social networking sites is indeed helpful for revealing the quality information of a healthcare provider, and the existence of a healthcare social networking site does benefit patients. Finally, we discuss factors affecting the platform owner’s decision.

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