It is well known in the credence-good literature that in an expert-client relationship, under the Liability assumptions, clients have to reject the expert's serious-treatment recommendations with a positive probability to ensure that the expert honestly recommends treatments. Inefficiency arises...

A monopolist sells experience goods with observable and experience attributes. The attributes are termed complements (substitutes) if an increase in one attribute raises (lowers) the marginal value of the other. Deviation in quality takes two periods to complete, possibly causing a V-shaped...

We study trust building in credence goods markets in a dynamic setting. An extreme lemon problem arises in the one-shot game and results in no trade. In the repeated game, an expert's honesty is monitored through consumers' rejection of his recommendations. We characterize the optimal...