Counter-Intuitive: Too Many Ethical Companies Is Bad For Society

For 'credence' services such as auto-repair, health care, and legal services, when more service providers care about the customer's well-being, society as whole may actually be worse off.    Why? Because the benefit to the customers for the service is difficult to assess before and even after the service. For example, when an auto mechanic tells a customer to make some repairs, the average customer is unable to discern the veracity of the recommendation. The risk of not doing repairs is unknown until a breakdown, if any, occurs. But if repairs are undertaken, their value may never be known.   read more

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