Journal article
Ripoffs, Lemons, and Reputation Formation in Agency Relationships: A Laboratory Market Study
The Journal of finance (New York), Vol.40(3), pp.809-820
07/1985
DOI: 10.1111/j.1540-6261.1985.tb05006.x
Abstract
This paper examines the effect of the moral hazard problem in an agency relationship where the principal cannot observe the level of service provided by the agent. Usi data from laboratory markets, we demonstrate that the presence of moral hazard leads to shirking by agents. However, this "lemons" phenomenon occurs only about one-half of the time. While there is evidence of reputation effects in these markets, seemingly reputable agents are often able to use opportunities for false advertising to their advantage and "ripoff" principals.
Details
- Title: Subtitle
- Ripoffs, Lemons, and Reputation Formation in Agency Relationships: A Laboratory Market Study
- Creators
- Douglas V. DejongRobert ForsytheRussell J. Lundholm - University of Iowa
- Resource Type
- Journal article
- Publication Details
- The Journal of finance (New York), Vol.40(3), pp.809-820
- DOI
- 10.1111/j.1540-6261.1985.tb05006.x
- ISSN
- 0022-1082
- eISSN
- 1540-6261
- Publisher
- American Finance Association
- Number of pages
- 12
- Language
- English
- Date published
- 07/1985
- Academic Unit
- Accounting
- Record Identifier
- 9984962550702771
Metrics
1 Record Views