Credence goods, experts and risk aversion
Résumé
The existing literature on credence goods and expert services has overlooked the importance of risk aversion. In this paper we extend a standard expert model of credence goods with verifiable service quality by considering risk-averse consumers. Our results show that the presence of risk aversion reduces the expert's incentive to invest in diagnosis and may thus lead to consumers' mistreatment.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)
Loading...