Abstract
Consumers have expectations about the quality of goods or services they should receive from an expert. In a credence goods market, provision of credence goods by an expert seems to be strongly affected by a priori consumers’ beliefs. One of the explanations for these beliefs may have its origin in the so-called confirmation bias. In this paper, we introduce a two-player dynamic psychological game in which we investigate the role of a consumer’s confirmation bias on an expert's decision. In our specification, we let the expert feel disappointed when the consumer receives a different quality from the one s/he expected. Overall, and as expected, our results suggest that experts with a high level of sensitivity are keen to follow consumers’ beliefs and provide them the quality they expected. This can lead to an increase in market (in)efficiency.