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  Reveal it or conceal it: On the value of second opinions in a low-entry-barriers credence goods market

Bindra, P. C., Kerschbamer, R., Neururer, D., & Sutter, M. (2020). Reveal it or conceal it: On the value of second opinions in a low-entry-barriers credence goods market.

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Item Permalink: http://hdl.handle.net/21.11116/0000-0006-6729-9 Version Permalink: http://hdl.handle.net/21.11116/0000-0006-67AC-5
Genre: Paper

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 Creators:
Bindra, Parampreet Christopher, Author
Kerschbamer, Rudolf, Author
Neururer, Daniel, Author
Sutter, Matthias1, Author              
Affiliations:
1Max Planck Institute for Research on Collective Goods, Max Planck Society, ou_2173688              

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Free keywords: Credence goods, expert services, second opinions, natural field experiment
 JEL: C93 - Field Experiments
 JEL: D82 - Asymmetric and Private Information; Mechanism Design
 Abstract: Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by asking for second opinions from other sellers. Yet, empirical evidence whether this is a successful strategy is scarce. Here we present a natural field experiment in the market for computer repairs. We find that revealing a second opinion from another expert to the seller does neither increase the rate of successful repairs nor decrease the average repair price. We assess under which conditions gathering a second opinion can be valuable.

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 Dates: 2020-05-18
 Publication Status: Published online
 Pages: -
 Publishing info: Bonn : Max Planck Institute for Research on Collective Goods, Discussion Paper 2020/11
 Table of Contents: -
 Rev. Type: -
 Identifiers: -
 Degree: -

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