Have you ever wondered if your auto mechanic was being straight with you? When consumers require the services of an expert to both diagnose and fix a problem – be the expert a doctor, a plumber, a seamstress or a mechanic – the consumer’s relative ignorance can sometimes put him or her in a precarious position.
Henry Schneider, an assistant professor of economics at Cornell University’s Johnson School of Management, calls this the “expert service dilemma,” and in recent research he set out to take a closer look at the phenomenon. Specifically, he wanted to see what effect the possibility for repeat business had on the accuracy of diagnoses.
Posing as an unwitting motorist in need of car repair, Schneider took the same car, with the same problems, to 40 different auto mechanics. In some instances, he presented himself as someone who had just moved to the area – and so, presumably, someone who would represent potential repeat business. In other instances, he told mechanics that he would soon be moving away. In each instance, the problems with the car were relatively easy to spot and repair: a loose battery cable, low engine coolant, and a blown taillight.
What did he discover? In 27 percent of cases, overtreatment ensued. That is, the mechanics diagnosed problems that weren’t present and repairs that weren’t necessary. In 77 percent of cases, undertreatment was the problem. Because two of the three issues with the car were relatively inexpensive to fix, Schneider hypothesized, many mechanics didn’t take the time to look for them.
The major finding was that reputation incentives – including the possibility of repeat business – did not seem to influence the accuracy of diagnosis. “The prevalence of under and overtreating, even when repeat business is possible, suggests that motorists are typically unable to detect its presence and indicates that diagnoses may be highly unreliable,” Schneider said.
So, yes, it’s really hard to find a good auto mechanic.
In an effort to give our readers a fuller picture of various management education programs around the globe, we will include periodic snapshots of the research professors are conducting at top schools. We welcome recommendations for interesting studies and papers!
