Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/122219
Authors: 
Kerschbamer, Rudolf
Sutter, Matthias
Dulleck, Uwe
Year of Publication: 
2015
Series/Report no.: 
Working Papers in Economics and Statistics 2015-04
Abstract: 
Credence goods markets suffer from inefficiencies caused by superior information of sellers about the surplus-maximizing quality. While standard theory predicts that equal mark-up prices solve the credence goods problem if customers can verify the quality received, experimental evidence indicates the opposite. We identify a lack of robustness with respect to heterogeneity in social preferences as a possible cause of this and conduct new experiments that allow for parsimonious identification of sellers' social preference types. Our results indicate that less than a fourth of the subjects behave in accordance with the standard assumption on preferences, the rest behaving either in line with other forms of selfish or in accordance with different variants of non- selfish social preferences. We discuss consequences of our findings for institutional design and agent selection.
Subjects: 
Credence Goods
Expert Services
Social Preferences
Distributional Preferences
Other-Regarding Preferences
Behavioral Economics
Experimental Economics
JEL: 
C72
C91
D82
Document Type: 
Working Paper

Files in This Item:
File
Size
799.41 kB





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