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How Do Consumers Motivate Experts? Reputational Incentives in an Auto Repair Market

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One might expect the e ects on buyers and suppliers to be symmetric: for both the current owner and a potential buyer of a particular used car, the increased cost of usage for the current owner of that car if he or she keeps the car will exactly equal the increased cost of usage for the potential buyer, if the two have similar driving habits. In other words, one might expect an increase in gasoline prices to reduce the willingness-to-pay for a particular car by about the same amount that it reduces a potential supplier's willingness-to-accept for that car. This would imply that the demand curve for...

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