How distributional preferences shape incentives on (experimental) markets for credence goods
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Verifiability_5_2_2013.pdf__fP.pdf. |
Description
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.
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ID Code: | 62825 | ||
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Item Type: | Chapter in Book, Report or Conference volume (Conference contribution) | ||
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Measurements or Duration: | 40 pages | ||
Pure ID: | 32482984 | ||
Divisions: | Past > QUT Faculties & Divisions > QUT Business School Current > Schools > School of Economics & Finance |
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Copyright Owner: | Copyright 2013 [please consult the author] | ||
Copyright Statement: | This work is covered by copyright. Unless the document is being made available under a Creative Commons Licence, you must assume that re-use is limited to personal use and that permission from the copyright owner must be obtained for all other uses. If the document is available under a Creative Commons License (or other specified license) then refer to the Licence for details of permitted re-use. It is a condition of access that users recognise and abide by the legal requirements associated with these rights. If you believe that this work infringes copyright please provide details by email to qut.copyright@qut.edu.au | ||
Deposited On: | 10 Dec 2013 23:00 | ||
Last Modified: | 02 Mar 2024 01:36 |
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