Experts vs. discounters: Consumer free-riding and experts withholding advice in markets for credence goods

International Journal of Industrial Organization

Volumn 27, Issue 1, 2009, Pages 15-23

  Dulleck, Uwe ^a   Kerschbamer, Rudolf ^b  

^a QUEENSLAND UNIVERSITY OF TECHNOLOGY   (Australia)

^b UNIVERSITY OF INNSBRUCK   (Austria)

Author keywords

Contingent diagnostic fees; Credence goods; Discounters; Experts; Free diagnosis; Free riding consumers

Indexed keywords

CONTINGENT DIAGNOSTIC FEES; CREDENCE GOODS; DISCOUNTERS; EXPERTS; FREE DIAGNOSIS; FREE-RIDING CONSUMERS;

COMPETITION;

EID: 58149263296     PISSN: 01677187     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ijindorg.2008.02.005     Document Type: Article

References (24)

1. Alger I., and Salanié F. A theory of fraud and over-consumption in experts markets. Journal of Economics & Management Strategy 15 (2006) 853-881
2. Bolton P., and Bonano G. Vertical restraints in a model of vertical differentiation. Quarterly Journal of Economics 103 (1988) 555-570
3. Bouckaert J., and Degryse H. Price competition between an expert and a non-expert. International Journal of Industrial Organization 18 (2000) 901-923
4. Darby M., and Karni E. Free competition and the optimal amount of fraud. Journal of Law and Economics 16 (1973) 67-88
5. Dulleck U., and Kerschbamer R. Experts vs. Discounters - Competition and Market Unraveling When Consumers Do Not Know What They Need. Discussion Paper vol. 3565 (2005), CEPR, London
6. Dulleck U., and Kerschbamer R. On doctors, mechanics and computer specialists - the economics of credence goods. Journal of Economic Literature 44 (2006) 5-42
7. Emons W. Credence goods and fraudulent experts. Rand Journal of Economics 28 (1997) 107-119
8. Emons W. Product differentiation and price competition between a safe and a risky seller. Journal of Institutional and Theoretical Economics 156 (2000) 431-444
9. Emons W. Credence goods monopolists. International Journal of Industrial Organization 19 (2001) 375-389
10. Fong Y. When do experts cheat and whom do they target. Rand Journal of Economics 28 (2005) 113-130
11. Glazer J., and McGuire T. Price Contracts and Referrals in Markets for Services. Working Paper vol. 10/96 (1996), Institute of Business Research, Tel Aviv University
12. Klein B., and Murphy K.M. Vertical restraints as contract enforcement mechanisms. Journal of Law and Economics 31 (1988) 265-297
13. Krishna K., and Winston T. If at first you don't succeed...: profits, prices, and market structure in a model of quality with unknowable consumer heterogeneity. International Economic Review 44 (2003) 573-597
14. Liu, Ting (2006), Credence Goods Markets with Conscientious and Selfish Experts, Boston University, mimeo.
15. Marvel H., and McCafferty S. Resale price maintenance and quality certification. RAND Journal of Economics 15 (1984) 346-359
16. Pesendorfer W., and Wolinsky A. Second opinions and price competition inefficiency in the market for expert advice. Review of Economic Studies 70 (2003) 417-437
17. Perry D., and Besanko M.K. Resale price maintenance and manufacturer competition for exclusive dealerships. Journal of Industrial Economics 39 (1991) 514-544
18. Pitchik C., and Schotter A. Honesty in a model of strategic information transmission. American Economic Review 77 (1987) 1032-1036 Errata (1988), AER 78, 1164
19. Shaw D.J. Resale price maintenance as a private contract enforcement mechanism: the special services case. Southern Economic Journal 61 (1994) 52-68
20. Sülzle K., and Wambach A. Insurance in a market for credence goods. Journal of Risk and Insurance 72 (2005) 159-176
21. Telser G. Why should manufacturers want fair trade?. Journal of Law and Economics 3 (1960) 86-105
22. Taylor C. The economics of breakdowns, checkups, and cures. Journal of Political Economy 103 (1995) 53-74
23. Wolinsky A. Competition in a market for informed experts' services. Rand Journal of Economics 24 (1993) 380-398
24. Wolinsky A. Competition in markets for credence goods. Journal of Institutional and Theoretical Economics 151 (1995) 117-131