Partial credence goods on review platforms

Ronen Gradwohl and Artyom Jelnov

Games and Economic Behavior, 2024, vol. 148, issue C, 517-534

Abstract: We study a repeated credence goods market in which experts provide treatment to customers. We assume that the history of transactions is recorded on a review platform that contains information only about treatments, and not about non-treatments. We also introduce the notion of a partial credence good, where treated customers receive a noisy, ex post signal about the necessity of treatment. Absent such signals, there is a breakdown of the market. We provide a necessary and sufficient condition on the signals that guarantees the existence of any non-trivial equilibrium, as well as an efficient one.

Keywords: Credence goods; Evidence; Review platform; Efficiency (search for similar items in EconPapers)
JEL-codes: D80 D82 D83 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:517-534

DOI: 10.1016/j.geb.2024.11.002

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