What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods

Loukas Balafoutas, Adrian Beck (), Rudolf Kerschbamer and Matthias Sutter
Additional contact information
Adrian Beck: University of Innsbruck

No 5700, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the influence of passengers' presumed information and income on the extent of fraud. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud.

Keywords: asymmetric information; fraud; credence goods; taxi rides; natural field experiment; expert services (search for similar items in EconPapers)
JEL-codes: C93 D82 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2011-05
New Economics Papers: this item is included in nep-cta and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - revised and extended version published in: Review of Economic Studies, 2013, 80 (3), 876-891

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Related works:
Journal Article: What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods (2013)
Working Paper: What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods (2011)
Working Paper: What drives taxi drivers? A field experiment on fraud in a market for credence goods (2011)
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