We study delegating a consumer's treatment plan decisions to an altruistic physician. The physician's degree of altruism is his private information. The consumer's illness severity will be learned by the physician, and also will become his private information. Treatments are discrete choices,...

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...

We study firms' incentives to acquire private information on cost in a duopoly signaling game. Firms first choose how much to invest in information acquisition and then engage in dynamic price competition. In equilibrium firms acquire too little information from the perspective of industry...

In expert markets, different pricing schemes generate different financial incentives for sellers to defraud customers. Using rich microdata on New York City taxi rides, we examine the differences between trips of non-local passengers and those of comparable local passengers, and explore to what...