Competition Fosters Trust

Publikation: Working paper › Forskning

Standard

Competition Fosters Trust. / Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert.

2006.

Publikation: Working paper › Forskning

Harvard

Huck, S, Lünser, GK & Tyran, J-R 2006 'Competition Fosters Trust'. https://doi.org/10.2139/ssrn.946887

APA

Huck, S., Lünser, G. K., & Tyran, J-R. (2006). Competition Fosters Trust. https://doi.org/10.2139/ssrn.946887

Vancouver

Huck S, Lünser GK, Tyran J-R. Competition Fosters Trust. 2006 nov. 24. https://doi.org/10.2139/ssrn.946887

Author

Huck, Steffen ; Lünser, Gabriele K. ; Tyran, Jean-Robert. / Competition Fosters Trust. 2006.

Bibtex

@techreport{fdb183ef3d4f4050845c9588cc0a5460,
title = "Competition Fosters Trust",
abstract = "We study the effects of reputation and competition in a stylized market for experience goods. If interaction is anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting buyers access to all sellers' complete history has, somewhat surprisingly, no effect. On the other hand, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely.",
keywords = "Experience Goods, Competition, Reputation, Trust, Moral hazard, Information conditions",
author = "Steffen Huck and L{\"u}nser, {Gabriele K.} and Jean-Robert Tyran",
year = "2006",
month = nov,
day = "24",
doi = "10.2139/ssrn.946887",
language = "English",
type = "WorkingPaper",

}

RIS

TY - UNPB

T1 - Competition Fosters Trust

AU - Huck, Steffen

AU - Lünser, Gabriele K.

AU - Tyran, Jean-Robert

PY - 2006/11/24

Y1 - 2006/11/24

N2 - We study the effects of reputation and competition in a stylized market for experience goods. If interaction is anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting buyers access to all sellers' complete history has, somewhat surprisingly, no effect. On the other hand, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely.

AB - We study the effects of reputation and competition in a stylized market for experience goods. If interaction is anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting buyers access to all sellers' complete history has, somewhat surprisingly, no effect. On the other hand, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely.

KW - Experience Goods

KW - Competition

KW - Reputation

KW - Trust

KW - Moral hazard

KW - Information conditions

U2 - 10.2139/ssrn.946887

DO - 10.2139/ssrn.946887

M3 - Working paper

BT - Competition Fosters Trust

ER -

ID: 241647312