This experiment examines the relationship between payment systems and the quality and quantity of services provided in credence goods markets. By using a real-effort task to stimulate the decision making of service providers, the study finds that payment systems do indeed have an impact on...

We model competition on a credence market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the underlying quality ranking's precision by releasing individual...

In this paper, we experimentally investigate the effect of public consumer ratings on market outcomes in credence goods markets. Contrary to search or experience goods, consumers cannot evaluate all dimensions of trade for credence goods, which may inhibit the information and reputation-building...

In this paper, we experimentally investigate the effect of public consumer ratings on market outcomes in credence goods markets. Contrary to search or experience goods, consumers cannot evaluate all dimensions of trade for credence goods, which may inhibit the information and reputation-building...

In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such...

In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such...

We report the results of an experiment to systematically investigate the influence of different settings in credence good markets on opportunism in the sellers' decisions. We find that, as predicted by a cognitive dissonance model, the specific choice of the design features might be less...

Actors in various settings have been increasingly relying on algorithmic tools to support their decision-making. Much of the public debate concerning algorithms - especially the associated regulation of new technologies - rests on the assumption that humans can assess the quality of algorithms....

In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such...

Technological progress offers new and promising ways to provide targeted information to consumers and facilitate behavioral change. We conduct a randomized controlled trial with a global supermarket chain and food producer to evaluate the effectiveness of a targeted information intervention that...

We show that financial advisors recommend more costly products to female clients, based on minutes from about 27,000 real-world advisory meetings and client portfolio data. Funds recommended to women have higher expense ratios controlling for risk, and women less often receive rebates on upfront...

Credence goods markets are characterized by asymmetric information concerning the needed and/or provided quality between experts and consumers. The functioning of the market heavily relies on trust on the side of the consumer as well as trustworthiness on the side of the expert. However, a great...

We show that financial advisors recommend more costly products to female clients, based on minutes from about 27,000 real-world advisory meetings and client portfolio data. Funds recom-mended to women have higher expense ratios controlling for risk, and women less often receive rebates on...

We model competition on a credence market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the underlying quality ranking's precision by releasing individual...

In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

Credence-goods experiments have focused on stylized settings in which experts can perfectly identify the buyer’s best option and that option works without fail. However, in nature, credence goods involve uncertainties that complicate assessing the quality of service and advice. We introduce...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

In markets for credence goods – such as health care or repair services – fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts’ provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii)...

Credence goods markets are prone to fraudulent behavior and market inefficiencies due to informational asymmetries between sellers and customers. We examine experimentally the effects of diagnostic uncertainty and insurance coverage on the information acquisition and provision decisions by...

Actors in various settings have been increasingly relying on algorithmic tools to support their decision-making. Much of the public debate concerning algorithms - especially the associated regulation of new technologies - rests on the assumption that humans can assess the quality of algorithms....

We study credence goods in a general model. A consumer may suffer a loss which is a continuous random variable. Privately observing the loss value, an expert can provide a repair at a price to eliminate the consumer's loss. All perfect-Bayesian equilibria are inefficient, in that some losses are...

Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by asking for second opinions from other sellers. Yet, empirical evidence whether...

When experts have superior information on their customers' needs and appropriate treatment/repair/advice is a credence good, there are obvious incentives for opportunistic behavior. What compounds this is that experts regularly make treatment recommendations and price offers only after consumers...

Credence goods markets – like for health care or repair services – with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of...