Misconduct in Credence Good Markets
نویسندگان
چکیده
We study how monitoring, expert skill and consumer awareness a§ect the level of misconduct in markets with asymmetric information and price-taking experts. Theoretical predictions show that experts subject to more intense monitoring may be less ethical in equilibrium. Similarly, more experienced experts are predicted to exhibit greater levels of misconduct. We test these predictions in the insurance sales industry and Önd that monitored experts are 21 to 98% more likely to take advantage of customers, relative to unmonitored experts. We also Önd empirical evidence that more experienced experts are signiÖcantly more likely to mislead their customers.
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