Credence goods, experts and risk aversion

Article dans une revue: 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.

Auteur(s)

Olivier Bonroy, Stéphane Lemarié, Jean-Philippe Tropeano

Revue
  • Economics Letters
Date de publication
  • 2013
Mots-clés JEL
D82 L15
Mots-clés
  • Credence goods
  • Expert services
  • Risk aversion
Pages
  • 464-467
Version
  • 1
Volume
  • 120