Second opinions in markets for expert services: Experimental evidence

Wanda Mimra, Alexander Rasch and Christian Waibel

Journal of Economic Behavior & Organization, 2016, vol. 131, issue PB, 106-125

Abstract: We experimentally investigate the role of second opinions in markets where experts such as physicians both diagnose and provide the services. Physicians may exploit their informational advantage and overtreat their patients by providing a more costly and expensive treatment than necessary. We show that introducing costly second opinions significantly reduces the level of overtreatment. Lowering search costs leads to significantly more second opinions, but the overtreatment level does not decrease. Under low but not under high search costs, market efficiency rises with the introduction of second opinions, as the reduction in treatment costs due to less overtreatment exceeds the increase in incurred search costs.

Keywords: Overtreatment; Second opinion; Physician experts; Credence goods; Search costs (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (27)

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Related works:
Working Paper: Second Opinions in Markets for Expert Services: Experimental Evidence (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:131:y:2016:i:pb:p:106-125

DOI: 10.1016/j.jebo.2016.03.004

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