Credence goods markets, online information and repair prices: A natural field experiment

Rudolf Kerschbamer, Daniel Neururer and Matthias Sutter

Journal of Public Economics, 2023, vol. 222, issue C

Abstract: Credence goods markets are characterized by large informational asymmetries between consumers and expert sellers. In two waves of a natural field experiment in the market for computer repairs we study whether consumers benefit from accessing online information about their needs or previous consumers’ experience with particular sellers. We find that gaining noisy knowledge about one’s needs and revealing it to the seller is a costly mistake, since seemingly better informed customers pay, on average, higher prices. By contrast, accessing online ratings helps identifying sellers who provide appropriate quality at reasonable prices, in particular on rating platforms that filter out untrustworthy reviews.

Keywords: Credence goods; Fraud; Online information; Rating platforms; Field experiment (search for similar items in EconPapers)
JEL-codes: C93 D82 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:222:y:2023:i:c:s0047272723000737

DOI: 10.1016/j.jpubeco.2023.104891

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