In markets for credence goods sellers are better informed than their customers about the quality that yields the highest surplus from trade. This paper studies second-degree price-discrimination in such markets. It shows that discrimination regards the amount of advice offered to customers and...

This article addresses the mediating effect of corruption on the influence of stringency of environmental regulation on firms' voluntary environmental performance. Using panel data from adoption of the EU Eco-Management and Audit Scheme (EMAS) across European Union countries from 1995 to 2011,...

In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. Experts may exploit their informational advantage by defrauding customers. Market institutions have been shown theoretically to be effective in mitigating fraudulent expert...

When experts have superior information on their customers' needs and appropriate treatment/repair/advice is a credence good, there are obvious incentives for opportunistic behavior. What compounds this is that experts regularly make treatment recommendations and price offers only after consumers...

We review the literature on credence goods since Dulleck and Kerschbamer (Journal of Economic Literature 44(1), 5-42, 2006). We consider various markets for credence goods and briefly discuss evidence on the extent of fraud. We then review theoretical and empirical contributions on the...

Trade-related measures aim to regulate side-effects in international environmental agreements and are expected to positively influence the level of participation in the agreements as well as their degree of stability. In this paper we examine one side-effect of the 1994 International Tropical...

Evidence on behavior of experts in credence goods markets raises an important causality issue: Do "fair prices" induce "good behavior", or do "good experts" post "fair prices"? To answer this question we propose and test a model with three seller types: "the good" choose fair prices and behave...

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...

We study optimal direct mechanisms for a credence goods expert who can be altruistic or spiteful. The expert has private information about her distributional preferences and possibly also about her customer's needs. We introduce a method that allows the customer to offer separate contracts to...

This paper studies the incentives for credence goods experts to invest effort in diagnosis if effort is both costly and unobservable, and if they face competition by discounters who are not able to perform a diagnosis. The unobservability of diagnosis effort and the credence characteristic of...