Credence goods, experts and risk aversion

Olivier Bonroy, Stéphane Lemarié and Jean-Philippe Tropeano

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: The existing literature in expert-customer relationship concludes that when: i) consumers are homogenous, ii) consumers are committed with an an expert once this one made a recommendation, and iii) the type of treatment provided is verifiable, an expert finds optimal to serve efficiently his customers. This work shows that the previous result may not occur when consumers are not risk-neutral. Our result, that holds in a monopoly setting and under Bertrand competition, suggests that risk averse consumers have more likely to be mistreated by experts.

Keywords: CREDENCE GOODS; EXPERT SERVICES; RISK AVERSION (search for similar items in EconPapers)
JEL-codes: D40 D82 L15 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-mkt and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Credence goods, experts and risk aversion (2013)
Working Paper: Credence goods, experts and risk aversion (2013)
Working Paper: Credence goods, experts and risk aversion (2013)
Working Paper: Credence goods, experts and risk aversion (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:gbl:wpaper:201005

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