Arbeitspapier
The Role of Diagnostic Ability in Markets for Expert Services
In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. Experts may exploit their informational advantage by defrauding customers. Market institutions have been shown theoretically to be effective in mitigating fraudulent expert behavior. We analyze whether this positive result carries over to a situation in which experts are heterogeneous in their diagnostic abilities. We find that efficient market outcomes are always possible. However, inefficient equilibria can also exist. If, in equilibrium, experts provide diagnosis-independent treatments, an increase in experts’ ability or in the probability of high-ability experts might not improve relative market efficiency.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 8704
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Information and Product Quality; Standardization and Compatibility
- Thema
-
credence good
diagnosis
expert
fraud
overtreatment
undertreatment
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Liu, Fang
Rasch, Alexander
Schwarz, Marco Alexander
Waibel, Christian
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and Ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Liu, Fang
- Rasch, Alexander
- Schwarz, Marco Alexander
- Waibel, Christian
- Center for Economic Studies and Ifo Institute (CESifo)
Entstanden
- 2020
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