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Partial credence goods on review platforms

Author

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  • Gradwohl, Ronen
  • Jelnov, Artyom

Abstract

We study a repeated credence goods market in which experts provide treatment to customers. We assume that the history of transactions is recorded on a review platform that contains information only about treatments, and not about non-treatments. We also introduce the notion of a partial credence good, where treated customers receive a noisy, ex post signal about the necessity of treatment. Absent such signals, there is a breakdown of the market. We provide a necessary and sufficient condition on the signals that guarantees the existence of any non-trivial equilibrium, as well as an efficient one.

Suggested Citation

  • Gradwohl, Ronen & Jelnov, Artyom, 2024. "Partial credence goods on review platforms," Games and Economic Behavior, Elsevier, vol. 148(C), pages 517-534.
    • Handle: RePEc:eee:gamebe:v:148:y:2024:i:c:p:517-534
    DOI: 10.1016/j.geb.2024.11.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Credence goods; Evidence; Review platform; Efficiency;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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