CREDENCE GOODS MARKETS WITH CONSCIENTIOUS AND SELFISH EXPERTS*

2011/02/01 by Ting Liu · 2 citations
Decision Sciences · Social Sciences · Business, Management and Accounting · #Auction Theory and Applications #Experimental Behavioral Economics Studies #Consumer Market Behavior and Pricing

paper · doi:10.1111/j.1468-2354.2010.00626.x

Abstract

In a credence good market, sellers know more about buyers’ necessity of the good. Because of this information asymmetry, a selfish seller may exaggerate buyers’ necessity of the good. This article investigates how the presence of conscientious experts affects selfish experts’ behavior. In a monopoly setting, it shows that the presence of a conscientious expert may result in more fraudulent behavior by the selfish expert. This result holds in a competitive setting.

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