Arbeitspapier
Reciprocity and gift exchange in markets for credence goods
We study the role of reciprocity in markets where expert-sellers have more information about the severity of a problem faced by a consumer. We employ a standard experimental credence goods market to introduce the possibility for consumers to gift the expert-seller before the diagnostic, where the gift is either transferred unconditionally or conditionally on solving the problem. We find that both types of gift reduce undertreatment, whereas unconditional gifts also reduce overcharging and increase undercharging, suggesting that unconditional gifts are perceived as more kind. For high-severity consumers gifting reduces market inefficiencies, although the presence of low-severity consumers mitigates overall efficiency gains.
- Language
-
Englisch
- Bibliographic citation
-
Series: IRENE Working Paper ; No. 20-09
- Classification
-
Wirtschaft
Design of Experiments: Laboratory, Individual
Consumer Protection
Asymmetric and Private Information; Mechanism Design
- Subject
-
Credence Goods
Gift Exchange
Asymmetric Information
Lab Experiment
- Event
-
Geistige Schöpfung
- (who)
-
Kandul, Serhiy
Lanz, Bruno
Reins, Evert
- Event
-
Veröffentlichung
- (who)
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University of Neuchâtel, Institute of Economic Research (IRENE)
- (where)
-
Neuchâtel
- (when)
-
2020
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kandul, Serhiy
- Lanz, Bruno
- Reins, Evert
- University of Neuchâtel, Institute of Economic Research (IRENE)
Time of origin
- 2020
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Algorithmic advice as a credence good
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Credence goods, costly diagnosis, and subjective evaluation
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