Pauly and satterthwaite show that when physicians become numerous, the average number of friends who see any provider diminishes. this, in turn, diminishes the average level of information available to consumers, leading to:

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Pauly and ......................... leading to REDUCTION IN PRICE RESPONSIVENESS, WHICH ULTIMATELY LEADS TO INCREASE IN PRICE.
When the level of information that is available to the consumers is reduced, they will lack information about better alternative goods with cheaper price in the market, this will ensure that they pay the price that is been levied on a particular product, and this in turn can leads the producer to increase the price they charge for their products or services. Thus, reduced information gives individual firms some additional monopoly power 
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