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Abstract (English)
With credence goods consumers cannot judge actual quality neither before purchase - ex ante - nor after purchase - ex post -. Trust has to replace own examination and verification. Applying Choquet-Expected Utility theory, a general model of credence goods is developed which takes the problem of trust explicitly in its view and generalizes the problem of quality uncertainty on the ?market for lemons? of Akerlof (1970) to ?quality ambiguity? with credence goods. The model shows the market mechanism only performing well in providing credence goods when consumers? trust in given information is not too low. With trust too low, sellers of credence goods will be driven out of the market by trust induced adverse selection. In market equilibrium prices will always be lower compared to equilibrium prices for experience goods.
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Notes
Publication license
Publication series
Agricultural economics working paper series (Hohenheimer agrarökonomische Arbeitsberichte); 09
Published in
Faculty
Faculty of Agricultural Sciences
Institute
Institute of Agricultural Policy and Markets
Examination date
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Edition / version
Citation
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DOI
ISSN
ISBN
Language
German
Publisher
Publisher place
Classification (DDC)
630 Agriculture
Original object
Standardized keywords (GND)
Sustainable Development Goals
BibTeX
@techreport{Benner2004,
url = {https://hohpublica.uni-hohenheim.de/handle/123456789/5006},
author = {Benner, Dietrich},
title = {Quality ambiguity and the market mechanism for credence goods},
year = {2004},
school = {Universität Hohenheim},
series = {Agricultural economics working paper series (Hohenheimer agrarökonomische Arbeitsberichte)},
}