Project title Impression formation and credence goods
Duration  10 weeks
Description

Most work in contract theory is centered on how to design incentive compatible contracts. There is a large empirical and experimental literature on how incentive compatible contracts outperform incentive incompatible contracts (i.e., Lazear, 2000; Baker, 2000; Anderhub et al. 2002; Karakostas et al. 2017). Yet, most contracts in real life are incomplete and at best only partially incentive compatible.

This is particularly true for credence goods as the inability of the buyer (principal) to evaluate the quality of the good(s) forces him to rely on his impressions regarding the prosocial attitudes of the seller (agent). For example.

The project explores how the impressions that the buyers form regarding the prosocial attitudes of Sellers have meaningful economic implications for the choices made by both.

Expected outcomes & deliverables

The research student will have the opportunity to program an economics experiment, write instructions, and supervise the data collection process.

Student qualities

This project is open to economics and psychology students with a background in microeconomics or social psychology. Experience with zTree is a must.

Primary supervisor

Dr Alex Karakostas

Further information Students are encouraged to contact the supervisor via email if they have any questions: a.karakostas@uq.edu.au.