Konferenzbeitrag
Information in a Monopolist's Credence Good Market
Credence goods markets, such as those for car repairs and medical treatments, are generally characterized by an ex-ante and ex-post information asymmetry between the uninformed buyer and the informed seller. Previous literature demonstrates that efficiency and fraud in a monopolist credence goods market are crucially determined by two key assumptions concerning the verifiability of the quality provided and the expert's liability. In this paper, we identify the information distribution among customers as a third important determinant. Contrary to basic intuition, we find that improving the level of customers' information might actually lead to welfare losses. Further, we highlight the supremacy of the assumption regarding the expert's liability for determining whether informed customers have real effects on market outcomes. On the other hand and in contrast to traditional models, the verifiability of the quality provided is only of secondary importance.
- Language
-
Englisch
- Bibliographic citation
-
Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Economic Theory - Information and Uncertainty ; No. G01-V2
- Classification
-
Wirtschaft
Market Structure, Pricing, and Design: Monopoly
Asymmetric and Private Information; Mechanism Design
Market Structure, Firm Strategy, and Market Performance: General
Information and Product Quality; Standardization and Compatibility
Analysis of Health Care Markets
- Subject
-
Credence Goods
Liability
Verifiability
Information.
- Event
-
Geistige Schöpfung
- (who)
-
Jost, Peter-J.
Reik, Steffen
Ressi, Anna
- Event
-
Veröffentlichung
- (who)
-
ZBW - Leibniz-Informationszentrum Wirtschaft
- (where)
-
Kiel, Hamburg
- (when)
-
2019
- DOI
-
doi:10.1016/j.ijindorg.2020.102694
- Handle
- Last update
-
10.03.2025, 11:44 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
- Konferenzbeitrag
Associated
- Jost, Peter-J.
- Reik, Steffen
- Ressi, Anna
- ZBW - Leibniz-Informationszentrum Wirtschaft
Time of origin
- 2019
Other Objects (12)
Labour Market Frictions, Monetary Policy, and Durable Goods
Bundling information goods under 'breakeven' price
Bundling information goods and access – simulating competition
Elections and Market Provision of Information
A game model of new and remanufactured goods, brown and green consumers, and market share dominance
Public Goods and Territory
The value of personal information in the e-commerce market
How Transparency Kills Information Aggregation (And Why That May Be A Good Thing)
Transport Accessibility as Merit Good
Information Avoidance, Selective Exposure, and Fake(?) News - A Market Experiment
Good governance and territorial marketing - two sides of the same coin? Development of market orientation through governance mechanisms in local government.
Contagion and Information Frictions in Emerging Markets: The Role of Joint Signals
Labour Market Frictions, Monetary Policy, and Durable Goods
Bundling information goods under 'breakeven' price
Bundling information goods and access – simulating competition
Elections and Market Provision of Information
A game model of new and remanufactured goods, brown and green consumers, and market share dominance
Public Goods and Territory
The value of personal information in the e-commerce market
How Transparency Kills Information Aggregation (And Why That May Be A Good Thing)
Transport Accessibility as Merit Good
Information Avoidance, Selective Exposure, and Fake(?) News - A Market Experiment
Good governance and territorial marketing - two sides of the same coin? Development of market orientation through governance mechanisms in local government.
Contagion and Information Frictions in Emerging Markets: The Role of Joint Signals
Labour Market Frictions, Monetary Policy, and Durable Goods
Bundling information goods under 'breakeven' price
Bundling information goods and access – simulating competition
Elections and Market Provision of Information
A game model of new and remanufactured goods, brown and green consumers, and market share dominance
Public Goods and Territory
The value of personal information in the e-commerce market
How Transparency Kills Information Aggregation (And Why That May Be A Good Thing)
Transport Accessibility as Merit Good
Information Avoidance, Selective Exposure, and Fake(?) News - A Market Experiment
Good governance and territorial marketing - two sides of the same coin? Development of market orientation through governance mechanisms in local government.