Face/Off: The adverse effects of increased competition

Abstract Increased competition can result in market efficiency. However, alternatively, it may provoke unethical behavior by sellers attempting to avoid losses—a risk that be greater credence goods markets, where consumers find difficult determine the value of or services received. The New York City (NYC) taxi allows us investigate how increased due launch green-colored taxis (to serve only certain parts NYC) lead fraudulent drivers established yellow taxis. An empirical study more than 17 million matched trips revealed was most prevalent on routes which faced for both pickups and post-drop-off pickups. after green taxis, there no significant change trip distances rides subject a flat-rate fare to/from office buildings passengers were familiar with optimal routes.