Related papers: Credibility in Credence Goods Markets

We provide the first direct test of how the credibility of an auction format affects bidding behavior and final outcomes. To do so, we conduct a series of laboratory experiments where the role of the seller is played by a human subject who…

We propose a new notion of credibility for Bayesian persuasion problems. A disclosure policy is credible if the sender cannot profit from tampering with her messages while keeping the message distribution unchanged. We show that the…

An informed seller designs a dynamic mechanism to sell an experience good. The seller has partial information about the product match, which affects the buyer's private consumption experience. We characterize equilibrium mechanisms of this…

In credence goods markets such as health care or repair services, consumers rely on experts with superior information to adequately diagnose and treat them. Experts, however, are constrained in their diagnostic abilities, which hurts market…

A sender with private preferences would like to influence a receiver's action by providing information through a statistical test. The technology for information production is controlled by a monopolist intermediary, who offers a menu of…

How do consultants price expertise? This paper studies a problem of selling information products (expertise) to a buyer (client) who faces decision-making problem under uncertainty. The client is privately informed about the type of…

We study a cheap-talk game where two experts first choose what information to acquire and then offer advice to a decision-maker whose actions affect the welfare of all. The experts cannot commit to reporting strategies. Yet, we show that…

We model competition on a credence goods market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the aggregate…

A multiproduct seller is more informed than consumers about the value of her products to consumers. The seller posts a price list and segments the market through cheap-talk communication. We find that when both seller's and consumers'…

We study expert advice with career concerns and continuous private signals. The principal always implements the safe option, and implements the risky option with a probability increasing in the expert's reputation; outcomes, when realized,…

We revisit Popper's falsifiability criterion. A tester hires a potential expert to produce a theory, offering payments contingent on the observed performance of the theory. In our model, instead of knowing the true data-generating process,…

If you recommend a product to me and I buy it, how much should you be paid by the seller? And if your sole interest is to maximize the amount paid to you by the seller for a sequence of recommendations, how should you recommend optimally if…

We study information disclosure in competitive markets with adverse selection. Sellers privately observe product quality, with higher quality entailing higher production costs, while buyers trade at the market-clearing price after observing…

Reputation mechanisms offer an effective alternative to verification authorities for building trust in electronic markets with moral hazard. Future clients guide their business decisions by considering the feedback from past transactions;…

Central to privacy concerns is that firms may use consumer data to price discriminate. A common policy response is that consumers should be given control over which firms access their data and how. Since firms learn about a consumer's…

A sender first publicly commits to an experiment and then can privately run additional experiments and selectively disclose their outcomes to a receiver. The sender has private information about the maximal number of additional experiments…

We investigate the behavior of experts who seek to make predictions with maximum impact on an audience. At a known future time, a certain continuous random variable will be realized. A public prediction gradually converges to the outcome,…

In electronic marketplaces, after each transaction buyers will rate the products provided by the sellers. To decide the most trustworthy sellers to transact with, buyers rely on trust models to leverage these ratings to evaluate the…

A monopolistic seller aims to sell an indivisible item to multiple potential buyers. Each buyer's valuation depends on their private type and the item's quality. The seller can observe the quality but it is unknown to buyers. This quality…

Testing the validity of claims made by self-proclaimed experts can be impossible when testing them in isolation, even with infinite observations at the disposal of the tester. However, in a multiple expert setting it is possible to design a…