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This paper investigates the impact of four key economic variables on an expert firm’s incentive to defraud its customers in a credence goods market: the level of competition, the expert firm’s financial situation, its competence, and its reputational concerns. We use and complement the...
Persistent link: https://www.econbiz.de/10009754791
In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. As experts provide both diagnosis and treatment, this leaves scope for fraud. We experimentally investigate how intensity of price competition and the level of customer...
Persistent link: https://www.econbiz.de/10009754802
Persistent link: https://www.econbiz.de/10010359334
In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. As experts provide both diagnosis and treatment, this leaves scope for fraud. We experimentally investigate how intensity of price competition and the level of customer...
Persistent link: https://www.econbiz.de/10011793497
We experimentally investigate the role of second opinions in markets where experts like doctors both diagnose and provide the services. Experts may exploit their informational advantage over customers and overtreat by providing a more costly and expensive treatment than necessary. We show that...
Persistent link: https://www.econbiz.de/10011793524