We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal … success or failure of the low-cost treatment is observed only by the consumer. Payments can therefore not depend on the …

We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal … about whether a low-cost service is sufficient or whether a high-cost treatment is required to solve the consumer's problem … success or failure of the low-cost treatment is observed only by the consumer. Payments can therefore not depend on the …

We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal … about whether a low-cost service is sufficient or whether a high-cost treatment is required to solve the consumer's problem … success or failure of the low-cost treatment is observed only by the consumer. Payments can therefore not depend on the …