Leasing contracts are extensively used in durable goods markets. These contracts specify a rental rate and an option price at which the used good can be bought upon termination of the lease. This option price cannot be controlled when the car is sold. We show that in a world where quality is observable this additional control variable is ineffective. Under adverse selection instead, leasing con...

Trading outcomes generally depend on the quality of information available to market participants. Using a large scale field experiment that randomly manipulates the availability of quality-information in a wholesale automobile market, we measure the effect of information disclosure on market outcomes. As the theoretical literature predicts, more information increases expected revenues. However,...

Experts have better information about the appropriate quality of treatment or surplus from trade than their customers. Providing both diagnosis and treatment, this leaves scope for fraud. In a credence good set-up, we experimentally investigate how intensity of price competition and the level of customer information about past expert behavior in uence an expert's incentive to defraud his custom...

Economic theory indicates that firms can match workers to jobs and promote productivity-enhancing specialization better than markets, yet little data exists. We empirically test whether firms enhance matching and specialization in the context of obstetrics. We then examine whether consumers benefit from this. We find that high-risk patients in group practices match with specialists more than pa...

In this paper, we examine the incentives for firms to voluntarily disclose otherwise private information about quality attributes of differentiated products when those products have multiple attributes and consumers are heterogeneous in their tastes over these attributes. In particular, we focus on whether the so-called “unraveling result”—in equilibrium, firms fully disclose the quality of the...

Reputation mechanisms used by platform markets suffer from two problems. First, buyers may draw conclusions about the quality of the platform from single transactions, causing a reputational externality. Second, reputation measures may be coarse or biased, preventing buyers from making proper inferences. We document these problems using eBay data and claim that platforms can benefit from identi...