IDEAS home Printed from https://ideas.repec.org/a/rje/randje/v36y20052p391-411.html
   My bibliography  Save this article

Cheap-Talk Referrals of Differentiated Experts in Repeated Relationships

Author

Listed:
  • In-Uck Park

    (University of Bristol, U.K.)

Abstract

The effectiveness of cheap talk advice is examined in recurrent relationships between a customer and multiple experts who provide differentiated professional services. The main findings are: (i) Full honesty is not sustainable if the profitability of service provision varies widely across problems. (ii) As there are more experts due to finer specialization, the maximum equilibrium honesty level deteriorates. (iii) Nonetheless, the equilibria that satisfy an internal consistency condition, implement the same (unique) honesty level regardless of the number of experts. Furthermore, the customer can extract this honesty level by consulting a ``panel'' of only one or two (but no more) experts all the time.

Suggested Citation

  • In-Uck Park, 2005. "Cheap-Talk Referrals of Differentiated Experts in Repeated Relationships," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 391-411, Summer.
  • Handle: RePEc:rje:randje:v:36:y:2005:2:p:391-411
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Simona Grassi & Ching-to Albert Ma, 2016. "Information acquisition, referral, and organization," RAND Journal of Economics, RAND Corporation, vol. 47(4), pages 935-960, November.
    2. Fabio Landini & Antonio Nicolò & Marco Piovesan, 2013. "The Hidden Cost of Specialization," IFRO Working Paper 2013/9, University of Copenhagen, Department of Food and Resource Economics.
    3. Larry G. Epstein & Hiroaki Kaido & Kyoungwon Seo, 2016. "Robust Confidence Regions for Incomplete Models," Econometrica, Econometric Society, vol. 84, pages 1799-1838, September.
    4. Junghun Cho, 2008. "Sequential Cheap Talk from Advisors with Reputation," CERGE-EI Working Papers wp352, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    5. Alexander Rasch & Christian Waibel, 2018. "What Drives Fraud in a Credence Goods Market? – Evidence from a Field Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(3), pages 605-624, June.
    6. Li, Ming & Tymofiy Mylovanov, 2009. "Credibility for Sale: the Effect of Disclosure on Information Acquisition and Transmission," Working Papers 09008, Concordia University, Department of Economics, revised Oct 2009.
    7. Kohei Kawamura, 2007. "Constrained Communication with Multiple Agents: Anonymity, Equal Treatment, and Public Good Provision," Edinburgh School of Economics Discussion Paper Series 166, Edinburgh School of Economics, University of Edinburgh.
    8. Dina Mayzlin & Hema Yoganarasimhan, 2012. "Link to Success: How Blogs Build an Audience by Promoting Rivals," Management Science, INFORMS, vol. 58(9), pages 1651-1668, September.
    9. Schottmüller, Christoph, 2019. "Too good to be truthful: Why competent advisers are fired," Journal of Economic Theory, Elsevier, vol. 181(C), pages 333-360.
    10. repec:cgr:cgsser:03-07 is not listed on IDEAS
    11. Guanghua Han & Ming Dong, 2017. "Sustainable Regulation of Information Sharing with Electronic Data Interchange by a Trust-Embedded Contract," Sustainability, MDPI, vol. 9(6), pages 1-22, June.
    12. John P. Lightle, 2014. "The Paternalistic Bias of Expert Advice," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(4), pages 876-898, December.
    13. Daniele Condorelli & Andrea Galeotti & Vasiliki Skreta, 2018. "Selling through referrals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(4), pages 669-685, October.
    14. Bruno Jullien & In-Uck Park, 2009. "Seller Reputation and Trust in Pre-Trade Communication," Levine's Working Paper Archive 814577000000000330, David K. Levine.
    15. Dominik Erharter, 2012. "Credence goods markets, distributional preferences and the role of institutions," Working Papers 2012-11, Faculty of Economics and Statistics, Universität Innsbruck.
    16. Alexander Frankel & Michael Schwarz, 2014. "Experts And Their Records," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 56-71, January.
    17. Junghun Cho, 2006. "Multiple Advisors with Reputation," CERGE-EI Working Papers wp314, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:36:y:2005:2:p:391-411. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.