Advanced Search
MyIDEAS: Login to save this paper or follow this series

Car Mechanics in the Lab - Investigating the Behavior of Real Experts on Experimental Markets for Credence Goods

Contents:

Author Info

  • Adrian Beck

    ()

  • Rudolf Kerschbamer

    ()

  • Jianying Qiu

    ()

  • Matthias Sutter

    ()

Abstract

Credence goods, such as car repairs or medical services, are characterized by severe informational asymmetries between sellers and consumers, leading to fraud in the form of provision of insufficient service (undertreatment), provision of unnecessary service (overtreatment) and charging too much for a given service (overcharging). Recent experimental research involving a standard (student) subject pool has examined the influence of informational and market conditions on the type and level of fraud. We investigate whether professional car mechanics – as real sellers of credence goods – react in the same way to changes in informational and institutional constraints. While we find qualitatively similar effects in the fraud dimensions of undertreatment and overcharging for both subject pools, car mechanics are significantly more prone to supplying unnecessary services in all conditions, which could be a result of decision heuristics they learned in their professional training.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2014-02.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2014-02.

as in new window
Length: 24
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:inn:wpaper:2014-02

Contact details of provider:
Postal: Universitätsstraße 15, A - 6020 Innsbruck
Phone: 0512/507-7151
Fax: 0512/507-2788
Email:
Web page: http://www.uibk.ac.at/fakultaeten/volkswirtschaft_und_statistik/index.html.en
More information through EDIRC

Related research

Keywords: artefactual field experiment; car mechanics; credence goods;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Balafoutas, Loukas & Beck, Adrian & Kerschbamer, Rudolf & Sutter, Matthias, 2011. "What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods," IZA Discussion Papers 5700, Institute for the Study of Labor (IZA).
  2. Alevy, Jonathan E. & Haigh, Michael S. & List, John A., 2003. "Information Cascades: Evidence From A Field Experiment With Financial Market Professionals," Working Papers, University of Maryland, Department of Agricultural and Resource Economics 28608, University of Maryland, Department of Agricultural and Resource Economics.
  3. Omar Al-Ubaydli & John A. List, 2013. "On the Generalizability of Experimental Results in Economics: With A Response To Camerer," NBER Working Papers 19666, National Bureau of Economic Research, Inc.
  4. Asher Wolinsky, 1991. "Competition in a Market for Informed Experts' Services," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 959, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. E. Fehr & John A. List, . "The Hidden Costs and Returns of Incentives - Trust and Trustworthiness among CEOs," IEW - Working Papers 134, Institute for Empirical Research in Economics - University of Zurich.
  6. Dyer, D. & Kagel, J.H. & Levin, D., 1988. "A Comparison Of Naive And Experienced Bidders In Common Value Offer Auctions A Laboratory Analysis," Papers, Houston - Department of Economics 11, Houston - Department of Economics.
  7. Beck, Adrian & Kerschbamer, Rudolf & Qiu, Jianying & Sutter, Matthias, 2013. "Shaping beliefs in experimental markets for expert services: Guilt aversion and the impact of promises and money-burning options," Games and Economic Behavior, Elsevier, Elsevier, vol. 81(C), pages 145-164.
  8. repec:feb:framed:00135 is not listed on IDEAS
  9. Henry S. Schneider, 2012. "Agency Problems and Reputation in Expert Services: Evidence from Auto Repair," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 60(3), pages 406-433, 09.
  10. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 78(2), pages 311-29, March-Apr.
  11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  12. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 16(1), pages 67-88, April.
  13. Omar Al-Ubaydli & John A. List, 2012. "On the Generalizability of Experimental Results in Economics," NBER Working Papers 17957, National Bureau of Economic Research, Inc.
  14. Jonathan Gruber & Maria Owings, 1994. "Physician Financial Incentives and Cesarean Section Delivery," NBER Working Papers 4933, National Bureau of Economic Research, Inc.
  15. David J. Cooper, 1999. "Gaming against Managers in Incentive Systems: Experimental Results with Chinese Students and Chinese Managers," American Economic Review, American Economic Association, American Economic Association, vol. 89(4), pages 781-804, September.
  16. Jeffrey Carpenter & Erika Seki, 2005. "Do Social PreferencesIncrease Productivity? Field experimental evidence from fishermen in Toyoma Bay," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0515, Middlebury College, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Dominik Erharter, 2012. "Credence goods markets, distributional preferences and the role of institutions," Working Papers, Faculty of Economics and Statistics, University of Innsbruck 2012-11, Faculty of Economics and Statistics, University of Innsbruck.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inn:wpaper:2014-02. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janette Walde).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.