This paper studies the incentives for credence goods experts to invest effort in diagnosis if effort is both costly and … effort and the credence characteristic of the good induces experts to choose incentive compatible tariff structures. This … makes them vulnerable to competition by discounters. We explore the conditions under which honestly diagnosing experts …

between experts and consumers. The functioning of the market heavily relies on trust on the side of the consumer as well as … behavior of experts, however, is not significantly influenced by the health care framing, nor by the subject pool. …

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 …