On the value of second opinions: A credence goods field experiment

Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by gathering second opinions from other sellers. Yet, field experimental evidence whether this is a successful strategy is scarce. Here we present a natural field experiment in the market for computer repairs and show that revealing a second opinion from another expert does neither increase the rate of successful repairs nor decrease the average repair price charged by sellers. (C) 2021 The Authors. Published by Elsevier B.V.

Automated summary

The credence goods market, with information asymmetry between buyers and sellers, is prone to inefficiencies. While it is theoretically possible for consumers to protect themselves through seeking second opinions, field experimental evidence on the success of this strategy is scarce. A natural field experiment in the computer repair market revealed that providing a second opinion did not affect the rate of successful repairs or the average repair price charged by sellers.