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Author : Eric Schniter
Release : 2021
Genre :
Kind : eBook
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Book Synopsis Uncertainty and Reputation Effects in Credence Goods Markets by : Eric Schniter
Download or read book Uncertainty and Reputation Effects in Credence Goods Markets written by Eric Schniter. This book was released on 2021. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Dustin Tracy
Release : 2023
Genre :
Kind : eBook
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Book Synopsis Uncertainty and Reputation Effects in Credence Goods Markets by : Dustin Tracy
Download or read book Uncertainty and Reputation Effects in Credence Goods Markets written by Dustin Tracy. This book was released on 2023. Available in PDF, EPUB and Kindle. Book excerpt: 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 two sources of uncertainty. The first is diagnostic uncertainty; experts receive a noisy signal of buyer type so might make an 'honest' mistake when advising what is in buyers' best interests. The second is service uncertainty; the services available to the buyers do not always work. Both sources of uncertainty make detection of expert dishonesty more difficult, so are hypothesized to increase dishonesty by experts and decrease buyers' trust (willingness to consult experts for advice and to follow expert advice) - decreasing efficiency of the interactions. We also analyze how buyers use ratings and whether ratings restrain dishonesty and attenuate distrust by creating reliable reputations. In contrast to hypotheses, we find that uncertainty has no effect on honesty and increases trust; additionally, ratings do not improve efficiency of the transactions under uncertainty - in part due to buyers' tendency to 'shoot the messenger' (give low ratings) when they buy service that does not work due to bad luck, and to give experts the 'benefit of the doubt' (high ratings) when they buy service that may have been intentionally overprovided (not in the buyer's best interest).
Author : Loukas Balafoutas
Release : 2023
Genre :
Kind : eBook
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Book Synopsis Diagnostic Uncertainty and Insurance Coverage in Credence Goods Markets by : Loukas Balafoutas
Download or read book Diagnostic Uncertainty and Insurance Coverage in Credence Goods Markets written by Loukas Balafoutas. This book was released on 2023. Available in PDF, EPUB and Kindle. Book excerpt: 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) insurance coverage of consumers; (iii) malpractice payments for treatment failure; and (vi) consumer-regarding preferences of experts. Diagnostic imprecision unambiguously leads to less efficient provision. Insurance coverage and malpractice payments have an ambiguous effect on efficient provision. The impact of consumer-regarding preferences on efficiency is positive without insurance but ambiguous in the presence of insurance.
Author : Loukas Balafoutas
Release : 2023
Genre :
Kind : eBook
Book Rating : /5 ( reviews)
Book Synopsis Serving Consumers in an Uncertain World by : Loukas Balafoutas
Download or read book Serving Consumers in an Uncertain World written by Loukas Balafoutas. This book was released on 2023. Available in PDF, EPUB and Kindle. Book excerpt: 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 sellers and the trading decisions by consumers. Our results reveal that diagnostic uncertainty is a major source of inefficiency by decreasing efficient service provision. Insurance coverage has a positive net effect on market efficiency, despite making information acquisition and efficient service provision less likely. We also examine the role of -s and of sellers' prosociality in shaping service provision and information acquisition.
Author : Julia Rose
Release : 2019
Genre :
Kind : eBook
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Book Synopsis Status and Reputation Nudging by : Julia Rose
Download or read book Status and Reputation Nudging written by Julia Rose. This book was released on 2019. Available in PDF, EPUB and Kindle. Book excerpt: Status and reputation concerns are conjectured to be important especially in markets with information asymmetries between buyers and sellers, such as in credence goods markets. To investigate the effects of status and reputation on reciprocal behavior of sales personnel in a financial credence goods market, we run a natural field experiment. We send e-mail requests to insurance brokers asking for an appointment. We find that status nudging and, with a larger effect size, reputation nudging in the e-mails increase brokers' response rates compared to a neutral request. Both effects are robust across all responses, only counting affirmative responses, and in urban and rural areas.
