Universität zu Köln

Kerschbamer, Rudolf ORCID: 0000-0002-7666-7157 and Sutter, Matthias ORCID: 0000-0002-6143-8706 (2017). The Economics of Credence Goods - Survey of Recent Lab and Field Experiments. CESifo Econ. Stud., 63 (1). S. 1 - 24. OXFORD: OXFORD UNIV PRESS. ISSN 1612-7501

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Abstract

Many important markets, such as those for health care or repair services, are characterized by pronounced informational asymmetries between buyers and sellers - because the buyer cannot identify the quality of the product that fits her needs best, while the seller can do so by performing a diagnosis. The seller can then recommend the appropriate or an inappropriate quality. Since the buyer has no means to verify the correctness of the recommendation but has to rely on the honesty of the seller, such goods are called credence goods. Markets for credence goods are typically plagued by incentives for fraudulent behavior and by inefficiencies caused by actual or expected fraud, covering overprovision and overcharging. Although highly policy relevant, a carefully controlled analysis of the provision of credence goods through the use of experiments has only recently taken off. Here, we provide an overview about recent laboratory and field experiments on the economics of credence goods and discuss important implications and directions for future research.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Kerschbamer, Rudolf UNSPECIFIED orcid.org/0000-0002-7666-7157 UNSPECIFIED Sutter, Matthias UNSPECIFIED orcid.org/0000-0002-6143-8706 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-238845
DOI:	10.1093/cesifo/ifx001
Journal or Publication Title:	CESifo Econ. Stud.
Volume:	63
Number:	1
Page Range:	S. 1 - 24
Date:	2017
Publisher:	OXFORD UNIV PRESS
Place of Publication:	OXFORD
ISSN:	1612-7501
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language INSURANCE-COVERAGE; AGENCY PROBLEMS; FINANCIAL INCENTIVES; PRICE-COMPETITION; HEALTH-INSURANCE; REPUTATION; MARKET; EXPERTS; BAD; MECHANICS Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/23884