Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267420 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15683
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such mechanisms or because of reputational concerns of sellers. In our field experiment, we can disentangle self-selection from reputation effects. Based on 476 taxi rides with four different types of taxis, we can show strong reputation effects on the prices and service quality of drivers, while there is practically no evidence of a self-selection effect. We discuss policy implications of our findings.
Subjects: 
information asymmetries
reputation mechanisms
selection effects
credence goods
field experiment
JEL: 
C93
D82
Document Type: 
Working Paper

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