Credence goods in the literature: What the past fifteen years have taught us about fraud, incentives, and the role of institutions
Year: 2020
Type: article
Abstract: We review the literature on credence goods since Dulleck and Kerschbamer (2006). We consider various markets for credence goods and briefly discuss evidence on the extent of fraud. We then review theoretical and empirical contributions on the determinants of seller and consumer behavior in markets for credence goods. The topics include informational asymmetries, pro-social motivations and seller characteristics, as well as several features of the market structure and institutional environment (separation of diagnosis and treatment, liability, verifiability, reputational concerns, competition between experts and second opinions). We also describe recent developments in this area of research (such as the role of investing in more precise diagnostic technologies) and offer an outlook on future questions.
Authors: Loukas Balafoutas, Rudolf Kerschbamer
Institution: Universität Innsbruck
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $1,650
OpenAlex ID: W3004453219