Reveal It or Conceal It: On the Value of Second Opinions in a Low-Entry-Barriers Credence Goods Market

Parampreet Christopher Bindra, Rudolf Kerschbamer, Daniel Neururer () and Matthias Sutter
Additional contact information
Parampreet Christopher Bindra: University of Innsbruck
Daniel Neururer: University of Innsbruck

No 13344, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by asking for second opinions from other sellers. Yet, empirical evidence whether this is a successful strategy is scarce. Here we present a natural field experiment in the market for computer repairs. We find that revealing a second opinion from another expert to the seller does neither increase the rate of successful repairs nor decrease the average repair price. We assess under which conditions gathering a second opinion can be valuable.

Keywords: expert services; second opinions; natural field experiment; credence goods (search for similar items in EconPapers)
JEL-codes: C93 D82 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-06
New Economics Papers: this item is included in nep-com and nep-exp
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Citations: View citations in EconPapers (1)

Published - revised version published as 'On the value of second opinions: a credence goods field experiment' in: Economics Letters, 2021, 205, 109925

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Related works:
Working Paper: Reveal it or conceal it: On the value of second opinions in a low-entry-barriers credence goods market (2020)
Working Paper: Reveal it or conceal it: On the value of second opinions in a low-entry-barriers credence goods market (2020)
Working Paper: Reveal it or conceal it: On the value of second opinions in a low-entry-barriers credence goods market (2020)
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