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The Good, the Bad and the Naive: Do Fair Prices Signal Good Types or Do They Induce Good Behaviour?

Dulleck, Uwe; Johnston, David W.; Kerschbamer, Rudolf; … - Institute for the Study of Labor (IZA) - 2012

Evidence on behavior of experts in credence goods markets raises an important causality issue: Do "fair prices" induce … "good behavior", or do "good experts" post "fair prices"? To answer this question we propose and test a model with three … selection and fixed effects regressions support the model's predictions and show that causality goes from good experts to fair …

Persistent link: https://www.econbiz.de/10011279266

Guilt from Promise-Breaking and Trust in Markets for Expert Services: Theory and Experiment

Beck, Adrian; Kerschbamer, Rudolf; Qiu, Jianying; … - Institute for the Study of Labor (IZA) - 2010

to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert’s … provision and charging decisions. We argue that the expert’s promise induces a commitment that triggers guilt if the promise is … experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices …

Persistent link: https://www.econbiz.de/10008529143

The Economics of Credence Goods: On the Role of Liability, Verifiability, Reputation and Competition

Dulleck, Uwe; Kerschbamer, Rudolf; Sutter, Matthias - Institute for the Study of Labor (IZA) - 2009

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods...

Persistent link: https://www.econbiz.de/10005822832

The Impact of Distributional Preferences on (Experimental) Markets for Expert Services

Kerschbamer, Rudolf; Sutter, Matthias; Dulleck, Uwe - Institute for the Study of Labor (IZA) - 2009

as the main cause and design a parsimonious experiment with exogenous prices that allows classifying experts as either …

Persistent link: https://www.econbiz.de/10008550001

What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods

Balafoutas, Loukas; Beck, Adrian; Kerschbamer, Rudolf; … - Institute for the Study of Labor (IZA) - 2011

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the...

Persistent link: https://www.econbiz.de/10009021638

Second-Degree Moral Hazard in a Real-World Credence Goods Market

Balafoutas, Loukas; Kerschbamer, Rudolf; Sutter, Matthias - Institute for the Study of Labor (IZA) - 2013

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...

Persistent link: https://www.econbiz.de/10011156456

Dealer Pricing of Consumer Credit

Bertola, Giuseppe; Hochguertel, Stefan; Koeniger, Winfried - Institute for the Study of Labor (IZA) - 2002

Interest rates on consumer lending are lower when funds are tied to purchase of a durable good than when they are made available on an unconditional basis. Further, dealers often choose to bear the financial cost of their customers’ credit purchases. This paper interprets this phenomenon in...

Persistent link: https://www.econbiz.de/10005822225

On Price-Setting for Identtical Products in Markets without Formal Trade Barriers

Hassink, Wolter H.J.; Schettkat, Ronald - Institute for the Study of Labor (IZA) - 2001

This paper investigates price-setting for truly homogenous products sold in markets without any formal trade barriers. We use data from IKEA, a furniture company selling identical products in an identical shopping environment in different EU countries. We get four remarkable outcomes: 1) The law...

Persistent link: https://www.econbiz.de/10005822372