Miklos Sarvary

Temporal Differentiation and the Market for Second Opinions

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Abstract:
The author studies the pricing of information with private value (e.g., management consulting, legal advice, medical diagnosis). Anecdotal evidence shows that in some of these markets, competing information sellers split the business to sell only first or second opinions to their customers. The author explains this pricing practice by showing that second-opinion markets are a result of temporal differentiation.

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