A Fraudulent Expert and Short-Lived Customers∗
نویسنده
چکیده
A market where short-lived customers interact with a long-lived expert is considered. An expert privately observes whether or not a particular treatment is necessary for his customers and has an incentive to recommend the treatment even if it is unnecessary. Customers imperfectly observe the expert’s past actions. Truthful reporting at all times yields the expert his best equilibrium payoff when the expert is known to be opportunist (i.e., rational in the usual sense). If the customers believe that the expert might be an honest type, who always reports truthfully, then the expert can build his reputation for honesty, so then he defrauds his customers to achieve a higher payoff. In equilibrium, deception for a long period of time is extremely unlikely. However, it is a probability one event (in some of the equilibrium) when the expert’s customer is also a long-lived agent. (JEL C72, C73, D82, D83) ∗The author gratefully acknowledges financial support from the Scientific and Technological Research Council of Turkey (TUBITAK). †Faculty of Arts and Social Sciences, Sabancı University, 34956, Istanbul, Turkey. (e-mail: [email protected])
منابع مشابه
Nber Working Paper Series Experts and Their Records
Consider an environment where long-lived experts repeatedly interact with short-lived customers. In periods when an expert is hired, she chooses between providing a profitable major treatment or a less profitable minor treatment. The expert has private information about which treatment best serves the customer, but has no direct incentive to act in the customer's interest. Customers can observe...
متن کاملSubscription fraud prevention in telecommunications using fuzzy rules and neural networks
A system to prevent subscription fraud in fixed telecommunications with high impact on long-distance carriers is proposed. The system consists of a classification module and a prediction module. The classification module classifies subscribers according to their previous historical behavior into four different categories: subscription fraudulent, otherwise fraudulent, insolvent and normal. The ...
متن کاملReturn migration and reintegration challenges: lived experience of expert returnees via Iranian universities
With the expansion and diversification of the process of international displacement as a factor affecting the national development of countries, the arena of migration studies needs to be reconsidered. The rising trend of external migration in recent years has been identified as one of the challenges in the policy area and requires comprehensive pathology. This study was conducted to understand...
متن کاملImpact of Security Events and Fraudulent Transactions on Customer Loyalty: A Field Study
Security and Privacy has become a dominant issue for both consumers and corporations. In this paper, we investigate how customer behavior is affected after they have been a victim of financial fraud. Our analysis provides insights into how security concerns affect the continuation of the existing relationship of the customers depending on kind of fraudulent transactions. With the data from one ...
متن کاملExperts and Their Records
Consider an environment where long-lived experts repeatedly interact with shortlived customers. In periods when an expert is hired, she chooses between providing a profitable major treatment or a less profitable minor treatment. The expert has private information about which treatment best serves the customer, but has no direct incentive to act in the customer’s interest. Customers can observe ...
متن کامل