Journal
REVIEW OF ECONOMIC STUDIES
Volume 80, Issue 3, Pages 876-891Publisher
OXFORD UNIV PRESS
DOI: 10.1093/restud/rds049
Keywords
Credence goods; Expert services; Natural field experiment; Taxi rides; Fraud; Asymmetric information; Distributional preferences
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Funding
- Austrian Science Fund (FWF) [P 20796] Funding Source: researchfish
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Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behaviour by sellers. This article presents a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the influence of passengers' presumed information and income on the extent of fraud. We find that passengers with inferior information about optimal routes are taken on significantly longer detours, while lack of information on the local tariff system increases the likelihood of manipulated bills by about fifteen percentage points. Passengers' perceived income seems to have no effect on fraud.
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