Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109212
Authors: 
Rasch, Alexander
Waibel, Christian
Year of Publication: 
2015
Series/Report no.: 
DICE Discussion Paper 180
Abstract: 
This paper investigates the impact of four key economic variables on an expert firm's incentive to defraud its customers in a credence goods market: the level of competition, the expert firm's financial situation, its competence, and its reputational concerns. We use and complement the dataset of a nationwide field study conducted by the German Automobile Association that regularly checks the reliability of garages in Germany. We find that more intense competition and high competence lower a firm's incentive to overcharge. A low concern for reputation and a critical financial situation increase the incentive to overcharge.
Subjects: 
Asymmetric information
Auto repair market
Credence goods
Expert
Fraud
Overcharging
JEL: 
D82
L15
ISBN: 
978-3-86304-179-3
Document Type: 
Working Paper

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