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Credence goods markets, distributional preferences and the role of institutions

  • Dominik Erharter

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    We study credence goods markets where an expert not only cares for her own monetary payoff, but also for the monetary payoff of her customer. We show how an expert with heterogeneous distributional preferences responds to monetary incentives in the absence of institutions, under liability and/or verifiability and identify optimal contracts for an expert with distributional preferences in each of these settings.

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    File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2012-11.pdf
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    Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2012-11.

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    Length: 39
    Date of creation: Jun 2012
    Date of revision:
    Handle: RePEc:inn:wpaper:2012-11
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