Universität zu Köln

Waibel, Christian Georg (2013). Three Essays on Credence Goods: The Impact of Expert and Market Characteristics on the Level of Expert Fraud. PhD thesis, Universität zu Köln.

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Abstract

The present thesis analyzes how expert and market characteristics influence an expert's incentive to defraud his customers in a market for credence goods. An expert faces an informational advantage over his customers which may lead to fraudulent behavior. In chapter two, field data from the car repair market is used in order to investigate the impact of four key economic factors on the level of expert fraud. It is shown that an intense competition and a high expert competence reduce the level of expert fraud while a critical financial situation and low reputational concerns increase the level of fraud. In chapter three, the impact of other-regarding preferences on the level of expert fraud is studied. Experts face conscience costs when they defraud their customers. Customers face trust costs when receiving a major-treatment recommendation. It is shown that the level of fraud does not necessarily decrease in equilibrium when introducing these other-regarding preferences but may even rise. In chapter four, it is experimentally explored how price competition and two reputation mechanisms influence the expert's incentive to defraud. The level of expert fraud is lower under fixed than under flexible prices while the difference in the level of fraud between the two reputation mechanisms depends upon whether prices are fixed or flexible.

Item Type:	Thesis (PhD thesis)
Creators:	Creators Email ORCID ORCID Put Code Waibel, Christian Georg cwaibel@ethz.ch UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-50190
Date:	2013
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Weitere Institute, Arbeits- und Forschungsgruppen > Staatswissenschaftliches Seminar
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language Credence goods, expert markets, asymmetric information, fraud English
Date of oral exam:	22 January 2013
Referee:	Name Academic Title Wambach, Achim Prof., Ph.D. Rockenbach, Bettina Prof. Dr.
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/5019