Balafoutas, Loukas ORCID: 0000-0002-3477-5096, Kerschbamer, Rudolf ORCID: 0000-0002-7666-7157 and Sutter, Matthias ORCID: 0000-0002-6143-8706 (2017). SECOND-DEGREE MORAL HAZARD IN A REAL-WORLD CREDENCE GOODS MARKET. Econ. J., 127 (599). S. 1 - 19. HOBOKEN: WILEY. ISSN 1468-0297

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Abstract

In a field experiment in the market for taxi rides we investigate a phenomenon called second-degree moral hazard - the tendency of the supply side in a market to react to anticipated moral hazard on the demand side by increasing the extent or price of the service. Our moral hazard manipulation consists of some passengers explicitly stating that their expenses will be reimbursed. This has a strong positive effect on the likelihood and the amount of overcharging and consequently increases consumer expenditure. Our results suggest that second-degree moral hazard may have a severe impact on the provision of credence goods.

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Balafoutas, LoukasUNSPECIFIEDorcid.org/0000-0002-3477-5096UNSPECIFIED
Kerschbamer, RudolfUNSPECIFIEDorcid.org/0000-0002-7666-7157UNSPECIFIED
Sutter, MatthiasUNSPECIFIEDorcid.org/0000-0002-6143-8706UNSPECIFIED
URN: urn:nbn:de:hbz:38-241603
DOI: 10.1111/ecoj.12260
Journal or Publication Title: Econ. J.
Volume: 127
Number: 599
Page Range: S. 1 - 19
Date: 2017
Publisher: WILEY
Place of Publication: HOBOKEN
ISSN: 1468-0297
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: no entry
Uncontrolled Keywords:
KeywordsLanguage
REFERENCE-DEPENDENT PREFERENCES; YORK-CITY CABDRIVERS; ADVERSE SELECTION; INSURANCE MARKETS; FIELD EXPERIMENT; TAXI INDUSTRY; COMPETITION; ECONOMICS; DRIVERS; RECIPROCITYMultiple languages
EconomicsMultiple languages
Refereed: Yes
URI: http://kups.ub.uni-koeln.de/id/eprint/24160

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