Experts vs. Discounters: Consumer Free Riding and Experts Withholding Advice in Markets for Credence Goods

This paper studies the incentives for credence goods experts to invest effort in diagnosis if effort is both costly and unobservable, and if they face competition by discounters who are not able to perform a diagnosis. The unobservability of diagnosis effort and the credence characteristic of the good induce experts to choose incentive compatible tariff structures. This makes them vulnerable to competition by discounters. We explore the conditions under which honestly diagnosing experts survive competition by discounters; we identify situations in which experts misdiagnose consumers in order to prevent them from free-riding on experts' advice; and we discuss policy options to solve the free-riding consumers–cheating experts problem.

Evolutionary Perspectives

The standard approach to industrial economics starts with the industry’s basic conditions, then runs through the structure–conduct–performance paradigm of industrial organization, and finally considers government regulation and policy. Most creative industries segments have been studied in this way, for example in Albarran (2002) and Caves (2000). These approaches use standard economic analysis to explain the particular properties and characteristics of a specific industrial sector. The overview presented here is different again. It focuses on the creative industries and examines their economic effect, specifically their contribution to economic evolu -tion. This is an evolutionary systems approach to industrial analysis, where we seek to understand how a sector fits into a broader system of production, consumption, technology, trade and institutions. The evolutionary approach focuses on innovation, economic growth and endogenous transformation. So, rather than using economics to explain static or industrial-organization features of the creative industries, we are using an open systems view of the creative industries to explain dynamic ‘Schumpeterian’ features of the broader economy. The creative industries are drivers of economic transformation through their role in the origination of new ideas, in consumer adoption, and in facilitating the institutional embedding of new ideas into the economic order. This is not a novel idea, as economists have long understood that particular activities are drivers of economic growth and development, for example research and development, and also that particular sectors are instrumental to this process, for example high-technology sectors. What is new is the argument that cultural and creative sectors are also a key part of this process of economic evolution. We will review the case for that claim, and outline purported mechanisms. We will also consider why policy settings in the creative industries should be more in line with innovation and growth policy than with industry policy.

Are lemons really hot potatoes?

We model the hazard rate for car ownership spells. Our model allows us to distinguish among different types of adverse selection effects by observing the type of unobserved heterogeneity across owners of the same car. Our empirical results strongly suggest that there is a lemons effect because there is significant unobserved heterogeneity. However, they also suggest that the lemons effect is caused by the first owner rather than the manufacturer. Had the manufacturer created the lemon, the unobserved heterogeneity would be positively correlated over all owners of a given car. Instead we observe a negative correlation between the unobserved heterogeneity term for the first owner and the unobserved heterogeneity term for subsequent owners. © 2008 Elsevier B.V. All rights reserved.

Dynamic self-organization phenomena in complex ionized gas systems : new paradigms and technological aspects

An overview of dynamic self-organization phenomena in complex ionized gas systems, associated physical phenomena, and industrial applications is presented. The most recent experimental, theoretical, and modeling efforts to understand the growth mechanisms and dynamics of nano- and micron-sized particles, as well as the unique properties of the plasma-particle systems (colloidal, or complex plasmas) and the associated physical phenomena are reviewed and the major technological applications of micro- and nanoparticles are discussed. Until recently, such particles were considered mostly as a potential hazard for the microelectronic manufacturing and significant efforts were applied to remove them from the processing volume or suppress the gas-phase coagulation. Nowadays, fine clusters and particulates find numerous challenging applications in fundamental science as well as in nanotechnology and other leading high-tech industries.

Self-organization and dynamics of nanoparticles in chemically active plasmas for low-temperature deposition of silicon and carbon-based nanostructured films

Self-organization and dynamic processes of nano/micron-sized solid particles grown in low-temperature chemically active plasmas as well as the associated physico-chemical processes are reviewed. Three specific reactive plasma chemistries, namely, of silane (SiH4), acetylene (C 2H2), and octafluorocyclobutane (c-C4F 8) RF plasma discharges for plasma enhanced chemical vapor deposition of amorphous hydrogenated silicon, hydrogenated and fluorinated carbon films, are considered. It is shown that the particle growth mechanisms and specific self-organization processes in the complex reactive plasma systems are related to the chemical organization and size of the nanoparticles. Correlation between the nanoparticle origin and self-organization in the ionized gas phase and improved thin film properties is reported. Self-organization and dynamic phenomena in relevant reactive plasma environments are studied for equivalent model systems comprising inert buffer gas and mono-dispersed organic particulate powders. Growth kinetics and dynamic properties of the plasma-assembled nanoparticles can be critical for the process quality in microelectronics as well as a number of other industrial applications including production of fine metal or ceramic powders, nanoparticle-unit thin film deposition, nanostructuring of substrates, nucleating agents in polymer and plastics synthesis, drug delivery systems, inorganic additives for sunscreens and UV-absorbers, and several others. Several unique properties of the chemically active plasma-nanoparticle systems are discussed as well.