How distributional preferences shape incentives on (experimental) markets for credence goods

Kerschbamer, Rudolf, Sutter, Matthias, & Dulleck, Uwe (2013) How distributional preferences shape incentives on (experimental) markets for credence goods. In Botticini , Maristella , Abbring, Jaap, & Biais, Bruno (Eds.) Proceedings of EEA-ESEM2013, Gothenburg, Sweden, pp. 1-40.

View at publisher (open access)

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 of institutional design with respect to heterogeneity in distributional preferences as a possible cause and design new experiments that allow for parsimonious identification of sellers’ distributional types. Our results indicate that less than a fourth of the subjects behave according to standard theory’s assumption, the rest behaving either in line with non-standard selfish or in accordance with non-trivial other-regarding preferences. We discuss consequences of our findings for institutional design and agent selection.

Impact and interest:

Citation counts are sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

Full-text downloads:

93 since deposited on 10 Dec 2013
12 in the past twelve months

Full-text downloads displays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.

ID Code: 62825
Item Type: Conference Paper
Refereed: Yes
Additional URLs:
Keywords: Credence Goods , Expert services, Distributional preferences, Other-regarding preferences, Behavioural economics, Experimental economics
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2013 [please consult the author]
Deposited On: 10 Dec 2013 23:00
Last Modified: 25 Mar 2014 15:24

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page