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A credence good is a product or service that is difficult for the customer to value, even after it has been consumed. Customers may think that a credence good is high quality when it is in fact low quality. Alternatively, customers may be dissatisfied with a high quality credence good because it is difficult for them to see its value. It is common for customers to seek a second opinion for a credence good to evaluate its quality. The following are illustrative examples of a credence good.
Medical ServicesIt can be difficult for patients to evaluate the quality of medical advice and treatments.Home RepairsCertain types of home repairs such as plumbing are difficult to evaluate.HealthProducts that claim to be healthy.EducationThe quality of education. ConsultingExpert advice that is difficult for the client to evaluate such as legal advice.|
Type | | Definition | A product or service that is difficult for the customer to value, even after it has been consumed. | Related Concepts | |
Quality
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