Possibility of Consumer Inspection and Quality of Experience Goods

A monopolist sells experience goods with observable and experience attributes. The attributes are termed complements (substitutes) if an increase in one attribute raises (lowers) the marginal value of the other. Deviation in quality takes two periods to complete, possibly causing a V-shaped quality trend. The equilibrium observable attribute increases (decreases) in the seller's discount factor when the two attributes are complements (substitutes). For pure experience goods, turning one experience attribute observable can lower the remaining experience attribute and profit. Commitment of the observable attribute promotes consumers' trust and raises profit, but exogenously-imposed minimum quality standard can hamper trust when attributes are substitutes.