Credence Goods Monopolists

Winand Emons

Berkeley Olin Program in Law & Economics, Working Paper Series from Berkeley Olin Program in Law & Economics

Abstract: With a credence good, consumers are never sure about the extent of the good that they actually need. Experts such as doctors and lawyers, as well as auto mechanics and appliance service-persons (the sellers) not only provide the services, but also act as the expert in determining the customer's requirements. This information asymmetry between buyers and the seller creates strong incentives for the seller to cheat. We analyze whether the market mechanism may induce non-fraudulent seller behavior.

Date: 1997-01-03
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Related works:
Journal Article: Credence goods monopolists (2001)
Working Paper: Credence Goods Monopolists (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:oplwec:qt9c5508x4

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