Abstract
This paper investigates the impact of big data and analytics (BDA) on health IT market
competition as well as health IT provider's optimal BDA adoption decisions. To capture
the specific characteristics of BDA in healthcare, we simultaneously model BDA's healthcare
efficiency and privacy risk from consumer perspective and BDA's benefit and cost from
provider perspective in a stylized two-dimensional product differentiation framework.
The results indicate firm's optimal pricing strategies with the dynamic of BDA's efficiency
and privacy risk. In addition, BDA's influence on firms' outcomes and social welfare
are analytically pointed. Theoretically, this study has potentials to provide foundations
for future big data research by stylizing an analytical model to understand firm's
BDA adoption. Practically, insights for business managers on how to optimize strategies
of BDA adoption, and for social planners on how to conduct better policies to improve
healthcare service quality by promoting BDA adoption in healthcare, are derived.