The Review of Economics and Statistics 2026

Disentangling Reputation from Selection Effects in Markets with Informational Asymmetries: A Field Experiment

Theodore Alysandratos¹; Sotiris Georganas²; Matthias Sutter³

¹ University of Heidelberg · ² City, University of London · ³ Max Planck Institute for Research on Collective Goods, University of Cologne, University of Innsbruck, IZA Bonn, and CESifo Munich

Abstract

In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such mechanisms or because of reputational concerns of sellers. We show in a field experiment how to disentangle self-selection from reputation effects. Based on 476 taxi rides with four different types of taxis, we find strong evidence for reputation effects but little support for self-selection effects. We discuss policy implications of our findings.

DOI

10.1162/rest_a_01451

Pages

1-7

Language

en

Sources

openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓