The Economics of Advice

B-Tier
Journal: Review of Industrial Organization
Year: 2025
Volume: 67
Issue: 2
Pages: 111-131

Authors (2)

Winand Emons (Universität Bern) Severin Lenhard (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Abstract A consumer wants to buy one of three different products. An expert observes which of the three products is the best match for the consumer. From his knowledge of costs and the observation of prices, the consumer can infer the expert’s incentives. Under linear prices a monopolistic expert may truthfully reveal, may partially reveal, or may not reveal at all her information. The outcome is inefficient; moreover, the consumer gets some of the surplus. With a two-part tariff the expert truthfully reveals her information. The outcome is efficient, and the expert appropriates the entire surplus. If experts are competitive, they also truthfully reveal; here all of the surplus goes to consumers.

Technical Details

RePEc Handle
repec:kap:revind:v:67:y:2025:i:2:d:10.1007_s11151-025-10012-6
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-25