Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the influence of passengers' presumed information and income on the extent of fraud. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills. Higher income seems to lead to more fraud. JEL-Code: C930, D820.

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Using retailer case studies and a survey of employees, data are presented assessing the extent to which the introduction of self-scan checkouts in the retail environment affects the rate of shrinkage. It is argued that although available data currently suggest that they have little effect upon rates of shrinkage, the unique nature of the self-scan environment requires a more nuanced approach to the way in which crime prevention theory is used to understand the potential risks associated with this technology. It is concluded that retailers should think about creating ' zones of control ' for self-scan areas and that offending behaviour generated by customer frustration with this technology offers further evidence of the way in which theories of neutralisation, situational prevention and cognitive dissonance can inform the increasingly complex interplay between consumers and retail spaces.

In a credence goods game with an expert and a consumer, we study experimentally the impact of two devices that are predicted to induce consumer-friendly behavior if the expert has a propensity to feel guilty when he believes that he violates the consumerʼs payoff expectations: (i) an opportunity for the expert to make a non-binding promise; and (ii) an opportunity for the consumer to burn money. In belief-based guilt aversion theory the first opportunity shapes an expertʼs behavior if an appropriate promise is made and if it is expected to be believed by the consumer; by contrast, the second opportunity might change behavior even though this option is never used along the predicted path. Experimental results confirm the behavioral relevance of (i) but fail to confirm (ii).

Shrinkage continues to be a considerable cost to the retail industry, with a recent estimate suggesting that globally it could be as much as $278 billion a year. In addition, it is a problem that has proved difficult to resolve, despite billions of dollars of investment every year in new technologies by loss-prevention practitioners. A relatively common approach to try to reduce the extent of the problem has been the application of electronic article surveillance tags to retail products, either in the form of a soft tag (increasingly applied at the point of manufacture) or a hard tag (usually applied in the store) to deter and detect shop thieves. This study looked at the experience of one retail company that decided to switch one of its divisions from using hard tags to source-applied soft tags on clothing sold in its stores. The results were dramatic, with a 250% increase in shrinkage after 12 months in the stores with the new source tag compared with existing stores using hard tags. The study raises important questions about the importance of creating visibility and the relative difficulty of removing the tag when using security devices if deterrence is to be achieved in retail stores and the overall cost effectiveness of using source tagging as a means to reduce shrinkage.