What Drives Fraud in a Credence Goods Market?: Evidence from a Field Study

• Autores: Alexander Rasch, Christian Waibel
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 80, Nº. 3, 2018, págs. 605-624
• Idioma: inglés
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• Resumen

  • This paper investigates the impact of competition on an expert firm's incentive to defraud its customers in a credence goods market. Controlling for the competence of car repair shops, their financial situation, and reputational concerns, we use and complement the data set from a nationwide field study conducted by the German Automobile Association that regularly checks the reliability of garages in Germany. We find that more intense competition lowers a firm's incentive to defraud its customers.