experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices …

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 seller … quality; and the naive fall victim to a projection bias that all sellers behave like the bad types. OLS, sample selection and …

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 …

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 … cheat on quality; and "the naive" fall victim to a projection bias that all sellers behave like the bad types. OLS, sample …

price rigidity. Reputation powerfully amplifies the positive effects of social preferences on contract enforcement by … interactions, suggesting that it may aggravate price rigidities. Surprisingly, reputation in fact weakens the wage and price …

efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation …