MARKET FOR LEMONS

About of MARKET FOR LEMONS









Whimsley: Learning By Drinking

  • . Akerlof’s big idea is called “the market for lemons”—lemons as in bad quality cars, not as in the fruit—and it has had a huge impact on economics, winning him the Nobel Prize in 2002.
  • . The spiral continues and the market unravels until the only cars that can be sold are those for which the quality is certain: lemons.
  • . Even when buyers would be happy to spend money for good quality merchandise, and even when sellers could make some money by providing it, the “lemons problem” means that many potentially beneficial exchanges fail to take place.
  • . But there is more to the lemons problem than this.
  • . The market for lemons is both less than and more than the truth.
  • . * * * Hidden in the market for lemons is an explanation of why British beer could stay as low-quality for years, and of how CAMRA could give independent producers a chance to sell their products.
  • . CAMRA solved the lemons problem faced by independent breweries.
  • . The market for lemons means that brands can drive out word-of-mouth products as long as they are “good enough” to make the search for reliable information too costly.



    A Market For Lemons - The Economic Price of Internet Retail Fraud
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  • . "The Market For Lemons" was an economics paper written by George Akerlof.
  • . To start, let's find out a little background about "The Market For Lemons." First off, a "lemon" by definition is a product that looks decent enough, but at its heart is a sour-tasting, piece of junk.
  • . They are most commonly referred to in car markets, but lemons can also apply to many other kinds of goods such as web and information products.
  • . Now back in the sixties, George Akerlof started thinking about lemons while he was an assistant professor at Berkeley.
  • . The central example Akerlof seizes on in "The Market For Lemons" is the used car market.



    XLab: UC Berkeley's Experimental Social Science Laboratory
  • . The Nobel Committee cited Akerlof's 1970 paper, "The Market for 'Lemons, '" which for the first time described the role of asymmetric information in causing market perversity.



    DOJ/Antitrust
  • . LEMONS GROWN IN CALIFORNIA AND ARIZONA; PROPOSED WEEKLY LEVELS OF VOLUME REGULATION FOR THE 1991-92 SEASON | DOCKET NO.
  • . LEMONS GROWN IN CALIFORNIA AND ARIZONA; PROPOSED WEEKLY LEVELS OF VOLUME REGULATION FOR THE 1991-92 SEASON | DOCKET NO.
  • . FV-91-289PR COMMENTS OF THE DEPARTMENT OF JUSTICE By notice dated July 8, 1991, the United States Department of Agriculture ("USDA") requested comments on a proposed rule to regulate the quantity of fresh California-Arizona lemons in the 1991-92 season.
  • . The evidence is clear that prorates impose continuing costs on society by increasing the price of domestic fresh lemons above the level that would prevail in the absence of volume regulation, as well as by inducing wasteful overproduction of lemons.
  • . Specifically, prorate does not provide any risk reduction to growers that cannot be better achieved through the many free market alternatives available; and when lemons and other citrus fruits have been marketed without prorates or other volume restrictions, no apparent "disorder" or other harm resulted.

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    FT.com / Home UK - Any colour, so long as it's lemon
  • . In 1966, an assistant economics professor, George Akerlof, tried to explain why this is so in a working paper called "The Market for Lemons".
  • . And if the good cars aren't put up for sale, the lemons will be what is left.
  • . (If they do, that's evidence in favour of Akerlof's "lemons" model.) But that is not really the point, because used cars were just the beginning for Akerlof.
  • . How many of your colleagues are lemons? If you're competent but can't prove it to your boss, you may prefer to be freelance.


    FT.com / Arts & Weekend - Any colour, so long as it’s lemon
  • . In 1966, an assistant economics professor, George Akerlof, tried to explain why this is so in a working paper called “The Market for Lemons”.
  • . And if the good cars aren’t put up for sale, the lemons will be what is left.
  • . (If they do, that’s evidence in favour of Akerlof’s “lemons” model.) But that is not really the point, because used cars were just the beginning for Akerlof.
  • . How many of your colleagues are lemons? If you’re competent but can’t prove it to your boss, you may prefer to be freelance.


    Center for Research in Electronic Commerce UT Austin
  • . Quality Uncertainty and the Market for Lemons Whether it is a physical or a virtual market, one of the primary reasons why a market fails is asymmetric information: what a seller knows is different from what a buyer knows.
  • . For example, the uncertainty in product quality results in a market for lemons (Akerlof 1970).
  • . Buyers, therefore, are willing to pay only the expected, average price, which drives out good products and leaves only bad products (lemons).
  • . Concluding Remarks Although it is well understood that the Internet presents an exciting opportunities to reduce transaction costs, its future may depend on how non-technological but fundamentally economic issues such as the lemons problem are solved.
  • . "The Market for Lemons: Quality Uncertainty and the Market Mechanism." Quarterly Journal of Economics, 84: 488-500.


    References
  • . "The Market of 'Lemons': Quality Uncertainty and the Market Mechanism." Quarterly Journal of Economics 84, August: 488-500.
  • . "A Direct Test of the 'Lemons' Model: The Market for Used Pickup Trucks." American Economic Review 72, September: 836-40.
  • . "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards." Journal of Political Economy 87: 1328-46.
  • . "A Note on 'Lemons' Markets with Quality Certification." Bell Journal of Economics 9: 277-79.

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