Dulleck, Kerschbamer, Sutter 2011 (AER) — credence-goods lab experiment; "liability has crucial effect, verifiability minor, reputation little influence"

Claim: Dulleck, Kerschbamer, and Sutter (2011) ran lab experiments on credence-good markets and found:

• "Liability has a crucial, but verifiability at best a minor, effect" on market efficiency.
• "Allowing sellers to build up reputation has little influence, as predicted."

Source: Dulleck, U., Kerschbamer, R., & Sutter, M. (2011). American Economic Review (lab experimental credence-good paper).

Confidence: Verified (lab experimental).

For Candid — the load-bearing finding: This is the empirical basis for the brief's strongest claim. In a credence-good market, liability is what produces market efficiency. Reputation, including third-party-mediated reputation, has little independent effect.

Operational implications:

• Tarion's 7-year structural warranty (Tarion 1-2-7 warranty in full — year-by-year coverage from possession through year 7 (workmanship, building envelope, distribution systems, MSD)) is a stronger trust mechanism than any review aggregator. The warranty carries liability.
• A marketing vendor that offers no liability commitment competes against vendors with implicit liability (existing relationships, peer-coach cohort exposure, reference contracts that can be called).
• The right Candid pitch surfaces and absorbs liability: clear scope, documented milestones, transparent metrics, references the prospect can call without notice, milestone billing tied to inspectable deliverables.

Operationalized as: [[rule-name-credence-good-problem-explicitly-propose-liability-structures]] and [[rule-better-copy-is-wrong-strategy-credence-good-requires-liability]].