The Economics of Credence Goods: On the Role of Liability, Verifiability, Reputation and Competition

Arbeitspapier

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Papers in Economics and Statistics ; No. 2009-03

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Noncooperative Games ; Design of Experiments: Laboratory, Individual ; Market Structure, Pricing, and Design: General ; Asymmetric and Private Information; Mechanism Design
• Thema: Credence goods ; Experiment ; Liability ; Verifiability ; Reputation ; Competition ; Vertrauensgüter ; Haftung ; Wettbewerb ; Asymmetrische Information ; Marktmechanismus ; Test ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dulleck, Uwe ; Kerschbamer, Rudolf ; Sutter, Matthias
• Ereignis: Veröffentlichung
• (wer): University of Innsbruck, Department of Public Finance
• (wo): Innsbruck
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/73547
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ