Second Opinions in Markets for Expert Services: Experimental Evidence

Arbeitspapier

We experimentally investigate the role of second opinions in markets where experts like doctors both diagnose and provide the services. Experts may exploit their informational advantage over customers and overtreat by providing a more costly and expensive treatment than necessary. We show that introducing costly second opinions significantly reduces the level of overtreatment. Market efficiency rises as the reduction in treatment costs—due to less overtreatment—exceeds the increase in incurred search costs. Lowering customers’ search costs leads to significantly more second opinions, however, the overtreatment level does not decrease.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 14/192

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Information and Product Quality; Standardization and Compatibility
• Subject: Credence goods ; Experts ; Second opinion ; Overtreatment ; Search costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mimra, Wanda ; Rasch, Alexander ; Waibel, Christian
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2016

Further information

• DOI: doi:10.3929/ethz-a-010088976
• Handle: http://hdl.handle.net/10419/171635
• Last update: 10.03.2025, 11:44 AM CET