Matthew Grennan

Matthew Grennan
  • Assistant Professor of Health Care Management

Contact Information

  • office Address:

    307 Colonial Penn Center
    3641 Locust Walk
    Philadelphia, PA 19104

Research Interests: competitive strategy, empirical industrial organization, healthcare, innovation

Links: CV, Google Scholar Page


Matthew Grennan is an Assistant Professor of Health Care Management at The Wharton School of the University of Pennsylvania where he teaches an undergraduate course in health care entrepreneurship and MBA courses in health care marketing and the medical device sector. He is also a research affiliate of the National Bureau of Economic Research, Leonard Davis Institute, and Strategy Research Forum.

Professor Grennan holds a PhD in Strategy/Economics from New York University’s Stern School of Business. As an Assistant Professor in the Strategic Management area at the University of Toronto’s Rotman School of Management, Professor Grennan taught entrepreneurship in the Commerce program and statistical modeling/methods in the PhD program. He has also taught MBA health care economics at the Indian School of Business and guest lectured to PhDs on modeling methods at numerous universities.

Professor Grennan’s research in industrial organization economics touches on public policy and competitive strategy in healthcare markets, with a focus on negotiated pricing, innovation, and adoption of new technologies. His research has been funded by the National Science Foundation and published in leading journals such as the American Economic Review and Management Science. He is a member of the Academy of Management, American Economics Association, and Econometric Society.


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Professor Grennan’s research explores questions in economic policy and firm strategy, with empirical applications in the health care context. His focus is on developing new, better data sources—and when necessary new empirical and theoretical models—with two major streams: (1) the interaction between negotiated prices and competition in business-to-business markets and (2) how regulatory and competitive forces shape innovation and market outcomes. Much of his recent work looks more closely at how information (or lack thereof) available to market participants affects these policy and strategy decisions.

  • Ashley Swanson, Aaron Chatterji, Matthew Grennan, Kyle Myers, Welfare Effects of Physician-industry Interactions: Evidence from Patent Expiration.

  • Ashley Swanson, Stuart Craig, Matthew Grennan (Working), Mergers and Hospital Costs: New Evidence from Hospital Input Markets.

  • Ashley Swanson and Matthew Grennan (Working), Quantifying the Sources of Price Dispersion: Evidence from Hospital Procurement.

  • Ashley Swanson and Matthew Grennan (Forthcoming), Transparency and Negotiated Prices: The Value of Information in Hospital-Supplier Bargaining.

    Abstract: Using a detailed dataset of hospitals’ purchase orders, we find that information on purchasing by peer hospitals leads to reductions in the prices hospitals negotiate for supplies. Identification is based on staggered access to information across hospitals over time. Within coronary stents, reductions are concentrated among hospitals previously paying relatively high prices and for brands purchased in large volumes, and are consistent with resolving asymmetric information problems. Estimates across a large number of other important product categories indicate that the effects of information are largest in both absolute and relative terms for physician preference items (PPIs). Among PPIs, high-price, high-quantity hospital-brand combinations average 3.9 percent savings, versus 1.6 percent for commodities  

  • Matthew Grennan and Robert J. Town (Under Review), Regulating Innovation with Uncertain Quality: Information, Risk, and Access in Medical Devices.

    Abstract: We propose a model where new product quality is uncertain, but market participants learn over time. Regulation balances information’s role in reducing consumer risk versus reducing access to innovation. Using new data and variation between EU and US medical device regulations, we document patterns consistent with the model and estimate its parameters. We find: (1) without information from testing, risk would severely inhibit usage; (2) US policy maximizes total surplus in our estimated model while the EU could gain 20 percent with more pre-market testing; and (3) more “post- market surveillance” could increase surplus 24 percent.   

  • Matthew Grennan (2014), Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices, Management Science, 60, pp. 3011-3025.

    Abstract: In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e.g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability.

  • Matthew Grennan and Mara Lederman (Work In Progress), The Multiproduct Firm Advantage: Evidence From Regulatory Delay in Medical Devices.

    Abstract: Theory offers many explanations for why multiproduct firms dominate a variety of industries, but empirically measuring these forces is complicated by the fact that the scale and scope of the firm are typically endogenous decisions. This paper exploits exogenous variation in firm “multiproductness” induced by differing regulatory regimes in the US and EU to empirically measure the size and sources of multiproduct firm advantages in a medical device market. We find that the average multiproduct device firm enjoys spillovers across its product portfolio that increase the value of a new product introduction by 20.1 percent relative to a new single product firm. The available data suggest that at least part of this effect can be explained by: (1) increased information transmission and (2) greater physical design complementarities among products by multiproduct firms. We discuss these findings in the context of recent questions surrounding innovation, barriers to entry, and conflicts of interest in medical devices.   

  • Matthew Grennan (2013), Price Discrimination and Bargaining: Empirical Evidence from Medical Devices, American Economic Review, 103.

    Abstract: Many important issues in business-to-business markets involve price discrimination and negotiated prices, situations where theoretical predictions are ambiguous. This paper uses new panel data on buyer- supplier transfers and a structural model to empirically analyze bargaining and price discrimination in a medical device market. While many phenomena that restrict different prices to different buyers are suggested as ways to decrease hospital costs (e.g., mergers, group purchasing organizations, and transparency), I find that: (i) more uniform pricing works against hospitals by softening competition; and (ii) results depend ultimately on a previously unexplored bargaining effect.  


HCMG 391-001 Special Topics: Health Care Entrepreneurship

HCMG 853 Advanced Study Seminar: Medical Devices

Past Courses


    Delivering basic health care advances worldwide and continuing to increase lifespan and quality (in an affordable manner) represent some of the major societal challenges of our time. Addressing these challenges will require innovation in both medical technology and the ways in which health services are delivered. Through readings, cases, guest lectures, and your own entrepreneurial work outside of class, we will examine the environment facing prospective health care entrepreneurs: (1) sources of health care innovation; (2) the many "customers" in health care: patients, doctors, hospitals, insurers, and regulators; (3) the powerful established firms with developed clinical and sales expertise; (4) the investing community. Along the way we will develop a framework for thinking about what is different (and what is not) about the challenges of health care entrepreneurship.


    Successful medical devices are an amalgamation of creative and innovative thinking, clinical expertise, and engineering know-how that endures intense regulatory and reimbursement scrutiny. This course will provide a foundation for understanding the nuances of the medical device industry. It will cover topics ranging from device design and discovery, regulatory issues, marketing, reimbursement, management, and strategy. Classroom activities will be supplemented with optional tours of hospitals, research and manufacturing facilities, and hands-on demonstrations of devices. Though the course is intended primarily for MBA students, it will be open to medical and engineering students as well as to hospital house staff.

Awards and Honors

  • Excellence in Teaching Award, Wharton, 2017
  • NSF Grant “Empirical Analysis of Business-to-Business Bargaining: Evidence from Hospital Input Markets” (Co-PI with Ashley Swanson), 2016-2019
  • Teaching Excellence Award, Toronto Rotman, 2011-2013

In the News

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Latest Research

Ashley Swanson, Aaron Chatterji, Matthew Grennan, Kyle Myers, Welfare Effects of Physician-industry Interactions: Evidence from Patent Expiration.
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In the News

Is the FDA Too Tough on Medical Device Makers?

Are the FDA's medical device regulations too hard, too soft, or just right? Wharton research indicates that the agency is on the right track.

Knowledge @ Wharton - 2015/06/25
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Awards and Honors

Excellence in Teaching Award, Wharton 2017
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