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Search and Competition in Expert Markets

Yiran Cao et al.

RAND Journal of Economics2026https://doi.org/10.1111/1756-2171.70049article
AJG 4ABDC A*
Weight
0.50

Abstract

We analyze a model where consumers sequentially search experts for treatment recommendations and prices, facing either zero or a positive search cost, whereas experts simultaneously compete in these two dimensions. In equilibrium, experts may “cheat” by overstating the severity of a consumer's problem and recommending an unnecessary treatment, prices follow distributions depending on the problem type and the treatment, and consumers employ Bayesian belief updating about their problem types during search. Paradoxically, as search cost decreases, expert cheating and prices can both increase stochastically. However, if search cost is sufficiently small, competition will force all experts to behave honestly.

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https://doi.org/https://doi.org/10.1111/1756-2171.70049

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@article{yiran2026,
  title        = {{Search and Competition in Expert Markets}},
  author       = {Yiran Cao et al.},
  journal      = {RAND Journal of Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/1756-2171.70049},
}

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Search and Competition in Expert Markets

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.