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The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" [1] is a widely cited seminal paper in the field of economics which explores the concept of asymmetric information in markets. The paper was written in 1970 by George Akerlof and published in the Quarterly Journal of Economics .
Akerlof is perhaps best known for his article, "The Market for Lemons: Quality Uncertainty and the Market Mechanism", published in the Quarterly Journal of Economics in 1970, in which he identified certain severe problems that afflict markets characterized by asymmetric information, the paper for which he was awarded the Nobel Memorial Prize. [10]
In his papers, Schelling quotes the well-known "The Market for Lemons: Quality Uncertainty and the Market Mechanism" paper written in 1970 by George Akerlof. [8] Similarly, Granovetter cited the Nash Equilibrium game in his papers.
Created Date: 8/30/2012 4:52:52 PM
George Akerlof's paper The Market for Lemons [4] introduced a model to help explain a variety of market outcomes when quality is uncertain. Akerlof's primary model considers the automobile market where the seller knows the exact quality of a car. In contrast, the buyer only knows the probability of whether a vehicle is good or bad (a lemon).
When considering the market options there is possibility of purchasing a new lemon car as there is a used good car. [17] The uncertainty that arises from the probably of purchasing a lemon due to asymmetric information can cause the buyer to have doubts about the car's quality and inherent outcome when purchased. [ 18 ]
1 I would like to thank Ranking Member John Conyers, Jr. and Congresswomen Sheila Jackson Lee, Frederica Wilson and Corrine Brown for inviting the American Civil Liberties
3/5 It’s nice that Sam Steiner’s 2015 Fringe gem has been plucked out for the West End but it doesn’t seem the best way to serve a bright new writing talent