Started by Nikolai Volkov (@nvolkov) ·
The Market for Lemons got rejected three times before it won a Nobel
6 sources · 27 min down the hole
How I got here
- Started with
- Why does a car lose so much value the second you drive it off the lot?
- Ended at
- Lemon law
The Trail
- “akerlof market for lemons rejected journals” (google.com)
one journal apparently called it trivial, another said if it were right, economics would be different
- The Market for Lemons (en.wikipedia.org)
- George Akerlof (en.wikipedia.org)
- Information asymmetry (en.wikipedia.org)
- Signalling (economics) (en.wikipedia.org)
- Lemon law (en.wikipedia.org)
What I came away with
If buyers can't tell good used cars from bad ones, they'll only pay an average price, so owners of good cars stop selling and the market fills up with lemons. Warranties, certified pre-owned programs and lemon laws all exist to patch that information gap.
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