Misconduct in Credence Good Markets

Jennifer Brown and Dylan B. Minor

No 18608, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine misconduct in credence good markets with price taking experts. We propose a market-level model in which price-taking experts extract surplus based on the value of their firm's brand and their own skill. We test the predictions of the model using sales complaint data for exclusive and independent insurance agents. We find that exclusive insurance agents working for large branded firms are more likely to be the subject of a justified sales complaint, relative to independent experts, despite doing substantially less business. In addition, more experienced experts attract more complaints per year.

JEL-codes: D8 G2 L15 M5 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-cta
Note: IO
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Citations: View citations in EconPapers (4)

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