Price competition and reputation in credence goods markets: Experimental evidence

• 成果类型: Article
• 署名作者: Mimra, Wanda; Rasch, Alexander; Waibel, Christian
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; Heinrich Heine University Dusseldorf
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2016.09.012
• 发表日期: 2016
• 页码: 337-352
• 关键词: Credence good; Expert; FRAUD; Price competition; reputation; Overcharging; Undertreatment

摘要

In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. Because experts provide both the diagnosis and the treatment, there is opportunity for fraud. We experimentally investigate how the intensity of price competition and the level of customer information about past expert behavior influence experts' incentives to defraud their customers when experts can build up reputation. We show that the level of fraud is significantly higher under price competition than when prices are fixed, as the price decline under a competitive-price regime inhibits quality competition. More customer information does not necessarily reduce the level of fraud. (C) 2016 Elsevier Inc. All rights reserved.