Lee, Sanghoon; Ries, John; Somerville, C. Tsuriel - In: Journal of Urban Economics 73 (2013) 1, pp. 43-56
We propose a theory of how repairs affect prices under imperfect information. Our model reveals that repairs may lower … prices because, if repairs are not always successful, they may reveal negative information about product quality. We also … show that the price effect of repairs is increasing in the share of defective products in the population. Under perfect …