How to find an honest expert

September 11, 2007

My car makes a funny sound; something about sticky valves. I don’t know much about cars, nor do I care to learn. If I ask a mechanic to fix everything, he’ll overcharge me because we have an information asymmetry, he knows more than I do. So how can I get my car fixed without getting robbed? This same problem pops up everywhere. How can I trust the treatment recommended by my doctor? How can I trust my financial advisor on retirement options? The problem is that I want to separate the diagnosis from the implementation. I want to get a trustworthy mechanic to tell me what’s wrong for a flat fee, then I’ll shop around for the lowest cost mechanic. This sounds like a job for the Internet. If we had a cheap & reliable source for expert second opinions, it would reduce the information asymmetry and, hopefully, reduce prices.

Advertisements

2 Responses to “How to find an honest expert”

  1. bofo Says:

    This is the first time in my life that I’ve seen the term “information asymmetry” but I suppose that such a thing does indeed exist between you and mechanics. However even if your lack of knowledge is why they can say whatever, your lack of initiative to fix the problem yourself is why they can charge whatever. I’m sure there’s a term for that since it’s pretty much the basis of the service industry but I’m equally sure that it doesn’t matter.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: