Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283135 
Year of Publication: 
2023
Series/Report no.: 
Discussion Papers of the Max Planck Institute for Research on Collective Goods No. 2023/12
Publisher: 
Max Planck Institute for Research on Collective Goods, Bonn
Abstract: 
In markets for credence goods - such as health care or repair services - fraudulent behavior by better informed experts is a common problem. Our model studies how four common features shape experts' provision behavior in credence goods markets: (i) diagnostic uncertainty of experts; (ii) insurance coverage of consumers; (iii) malpractice payments for treatment failure; and (vi) consumer-regarding preferences of experts. Diagnostic imprecision unambiguously leads to less efficient provision. Insurance coverage and malpractice payments have an ambiguous effect on efficient provision. The impact of consumer-regarding preferences on efficiency is positive without insurance but ambiguous in the presence of insurance.
Subjects: 
Credence goods
diagnostic uncertainty
insurance coverage
social preferences
JEL: 
D82
G22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.