What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud.credence goods, expert services, natural field experiment, taxi rides, fraud, asymmetric information

What drives taxi drivers? A field experiment on fraud in a market for credence goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud.Credence goods, expert services, natural field experiment, taxi rides, fraud, asymmetric information

What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud.fraud, taxi rides, natural field experiment, expert services, credence goods, asymmetric information

Car Mechanics in the Lab - Investigating the Behavior of Real Experts on Experimental Markets for Credence Goods

We compare the behavior of car mechanics and college students as sellers in experimental credence goods markets. Finding largely similar behavior, we note much more overtreatment by car mechanics, probably due to decision heuristics they learned in their professional training

What drives taxi drivers? A field experiment on fraud in a market for credence goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud

Guilt from Promise-Breaking and Trust in Markets for Expert Services - Theory and Experiment

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert's provision and charging decisions. We argue that the expert's promise induces a commitment that triggers guilt if the promise is broken, and guilt is exacerbated by higher interaction prices. An experiment qualitatively confirms our predictions: (1) most experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices increase the commitment value of proper promises

What drives taxi drivers? A field experiment on fraud in a market for credence goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud

Guilt from promise-breaking and trust in markets for expert services: Theory and experiment

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert's provision and charging decisions. We argue that the expert's promise induces a commitment that triggers guilt if the promise is broken, and guilt is exacerbated by higher interaction prices. An experiment qualitatively confirms our predictions: (1) most experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices increase the commitment value of proper promises

What drives taxi drivers? A field experiment on fraud in a market for credence goods

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of 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. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud

Global-scale regionalization of hydrologic model parameters

Current state-of-the-art models typically applied at continental to global scales (hereafter called macroscale) tend to use a priori parameters, resulting in suboptimal streamflow (Q) simulation. For the first time, a scheme for regionalization of model parameters at the global scale was developed. We used data from a diverse set of 1787 small-to-medium sized catchments ( 10-10,000 km(2)) and the simple conceptual HBV model to set up and test the scheme. Each catchment was calibrated against observed daily Q, after which 674 catchments with high calibration and validation scores, and thus presumably good-quality observed Q and forcing data, were selected to serve as donor catchments. The calibrated parameter sets for the donors were subsequently transferred to 0.5 degrees grid cells with similar climatic and physiographic characteristics, resulting in parameter maps for HBV with global coverage. For each grid cell, we used the 10 most similar donor catchments, rather than the single most similar donor, and averaged the resulting simulated Q, which enhanced model performance. The 1113 catchments not used as donors were used to independently evaluate the scheme. The regionalized parameters outperformed spatially uniform (i.e., averaged calibrated) parameters for 79% of the evaluation catchments. Substantial improvements were evident for all major Koppen-Geiger climate types and even for evaluation catchments>5000 km distant from the donors. The median improvement was about half of the performance increase achieved through calibration. HBV with regionalized parameters outperformed nine state-of-the-art macroscale models, suggesting these might also benefit from the new regionalization scheme. The produced HBV parameter maps including ancillary data are available via