What Characterizes Credence Goods? A Critical Look at the Literature.

Gottschalk, Felix C.H.

doi:10.2139/ssrn.3114257

Cited by 11 publications

(3 citation statements)

References 67 publications

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“…In other words, pension savings as well as the decision on the timing of retirement are the so called credence goods, whose quality can be assessed only after the product is purchased and decision is made. In case of retirement plan or pension savings, quality cannot be evaluated, because the consumer has no previous experience with that kind of product and benefits are known only after a long period of time [Gottschalk 2018]. There are many studies on the impact credence goods characteristics on sellers' behaviour (see e.g.…”

Section: Literature Review Rational Retirement Strategy and Causes Of Irrationalitymentioning

confidence: 99%

Pension Strategies of Workers in a Country Getting Old Before Getting Rich

2018

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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Section: Literature Review Rational Retirement Strategy and Causes Of Irrationalitymentioning

confidence: 99%

Pension Strategies of Workers in a Country Getting Old Before Getting Rich

2018

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“…When buying wine, consumers face a much more complicated situation than for any other product they can purchase: the horizontal and vertical product differentiation is huge, and the differences between products are so specific that the average inexperienced consumer feels disoriented. Furthermore, it is widely accepted that wine is an "experience good" (Cardebat, 2017, p. 32;Thornton, 2013, p. 38), as its quality cannot be assessed before consumption, and to some extent a "credence good", as its quality is difficult to assess for inexperienced consumers even after consumption (Ashton, 2014;Goldstein et al, 2018;Gottschalk, 2018). With such information asymmetries between producers and consumers, the latter often make their choices based on various kinds of signals such as price, firm reputation and assessed product quality.…”

Section: Introductionmentioning

confidence: 99%

Does quality pay off? “Superstar” wines and the uncertain price premium across quality grades

et al. 2022

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We use data from Wine Spectator on 266,301 bottles from 12 countries sold in the United States to investigate the link between the score awarded by the guide and the price charged. The link between quality and price is positive, in line with the literature. In a deeper inspection, however, hedonic regressions show that the price premium attached to higher quality is significant only for “superstar” wines with more than 90 points (on a 50–100 scale), while prices of wines between 50 and 90 points are not statistically different from each other. Furthermore, an analysis performed through normal heteroskedastic and quantile regression models shows that the dispersion of quality-adjusted prices is described by an asymmetric U-shaped function of the score; that is, products with the lowest and highest quality have the highest residual standard deviation. Pursuing excellence is a risky strategy; the average price is significantly higher only for wines that achieve top scores, and the price premium becomes more volatile.

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“…6 6 The model by Inderst and Ottaviani (2012a) bears similarities to the credence goods model by Dulleck and Kerschbamer (2006). However, there are some important differences between the models – see Gottschalk (2018) for a discussion. …”

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confidence: 99%

Regulating Markets with Advice: An Experimental Study*

Gottschalk

2020

Oxf Bull Econ Stat

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We present a newly designed market experiment to study regulatory measures in markets with advice inspired by two recently developed theoretical models. In line with our predictions, our experimental markets create conflicts of interest and unsuitable advice biased towards high‐commission products. We examine whether two frequently discussed regulation measures – disclosure and fines for ex post unsuitable advice – reduce commission payments and improve advice. None of the regulation measures result in lower commissions and more suitable advice, however, and advice is equally biased in all treatments. Furthermore, with disclosure, conflicts of interest are enlarged, offsetting the potentially restraining effects of disclosure. The potential impact of various behavioural factors is discussed to encourage further research.

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What Characterizes Credence Goods? A Critical Look at the Literature.

Cited by 11 publications

References 67 publications

Pension Strategies of Workers in a Country Getting Old Before Getting Rich

Pension Strategies of Workers in a Country Getting Old Before Getting Rich

Does quality pay off? “Superstar” wines and the uncertain price premium across quality grades

Regulating Markets with Advice: An Experimental Study*

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