Lunch Seminar - Michał Krawczyk

29 November 2019

We kindly invite Faculty members, students and guests from outside of our Faculty for a next meeting within the Lunch Seminar which will take place on Wednesday, December 4 at 11:30 am in room A203 (ATTENTION: CHANGE OF TIME AND ROOM).

This time, prof. Michał Krawczyk will present his work “Positive online reviews signal a higher price, not integrity. A field experiment with auto repair shops.” (please find the abstract below). The meeting will be held in English.

The full schedule of the seminar series in this term is available here.

If you would like to present your work in the seminar, please contact dr Ewa Zawojska

Abstract: We run a field experiment involving over a thousand auto repair shops. We pretend to be incompetent customers, thereby giving the mechanics an opportunity to offer a service which is in fact clearly not needed yet (overtreatment). In doing so, we manipulate the model of the car (cheap vs. expensive), the gender of the customer, and whether they imply having visited the garage before or not. We also link these data with a data set of online customer reviews, asking if positive (negative) opinions are valuable signals of honest (dishonest) behaviour. We are aware of just one other (small-scale) experiment in a (different) credence good market to do so. It turns out that females as well as male owners of more expensive cars are more likely to be overtreated, whereas customer reviews are not an important predictor. Perhaps not surprisingly, the price quotes are higher for more expensive cars (although the actual cost of the service that would be incurred by the shop is the same) and in richer regions. Shops with a greater number of positive customer reviews are found to charge slightly more, possibly because they can hope to find customers anyway. Other variables we have experimentally manipulated (returning vs. new customer) or measured (size of settlement, density of local competition, distance from the highway) seem to play no role.

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