%0 Generic
%A Bohnet, I.
%A Harmgart, H.
%A Huck, S.
%A Tyran, J.R.
%C London, UK
%D 2004
%F discovery:14578
%I ESRC Centre for Economic Learning and Social Evolution
%K JEL classification: C72, C91, L14
%N 100
%T Learning trust
%U https://discovery.ucl.ac.uk/id/eprint/14578/
%X We examine the effects of different forms of feedback information on  the performance of markets that suffer from moral hazard problems due  to sequential exchange. As orthodox theory would predict, we find that  providing buyers with information about sellers’ trading history boosts  market performance. More surprisingly, this beneficial effect of incentives  for reputation building is considerably enhanced if sellers, too, can  observe other sellers’ trading history. This suggests that two-sided market  transparency is an important ingredient for the design of well-functioning  markets that are prone to moral hazard.