Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171635
Authors: 
Mimra, Wanda
Rasch, Alexander
Waibel, Christian
Year of Publication: 
2016
Series/Report no.: 
Economics Working Paper Series 14/192
Abstract: 
We experimentally investigate the role of second opinions in markets where experts like doctors both diagnose and provide the services. Experts may exploit their informational advantage over customers and overtreat by providing a more costly and expensive treatment than necessary. We show that introducing costly second opinions significantly reduces the level of overtreatment. Market efficiency rises as the reduction in treatment costs—due to less overtreatment—exceeds the increase in incurred search costs. Lowering customers’ search costs leads to significantly more second opinions, however, the overtreatment level does not decrease.
Subjects: 
Credence goods
Experts
Second opinion
Overtreatment
Search costs
JEL: 
D82
L15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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