Recommendations in credence goods markets with horizontal product differentiation
通过市场实验研究在横向产品差异的信誉品市场中，引入监督机构和公开卖家投资决策能否改善推荐质量，发现两者同时引入才能减少不当推荐，但福利不变。
• This paper investigates horizontally differentiated credence goods markets. • The impact of information-providing institutions is studied in a market experiment. • Only the joint introduction of both measures reduces mistreatment. • The distribution of welfare remains unaffected. I experimentally analyze whether the introduction of watchdogs and the revelation of sellers’ investment decisions can improve the market outcome in credence goods markets with horizontal product differentiation. Sellers can always give advice, yet they only observe consumers’ valuations if they invest. I find that in the absence of watchdogs and with concealed investment decisions, both prices and investment rates are low and sellers give selfish advice. Each measure alone is not sufficient to improve recommendations; only the joint introduction has a significant positive impact on both quality and frequency of recommendations, but leaves welfare unaffected.