Talk:The Market for Lemons

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I'm not convinced many of these products still end up in the marketplace (e.g. LCD monitors with dead pixels) is valid. See http://en.wikipedia.org/wiki/Dead_pixel dead pixels may actually be within specification.

Criticism? As a lay observer, this can be trivially shown to be incorrect - markets for used cars exist, even in the absence of lemon laws, so some of the assumptions must not match the real world. A section discussing this would be helpful....

The first paragraph indicates that information asymmetry is where "the seller knows more about a product than the buyer". My understanding is that information asymmetry can be either way(?) for example in management buy-outs. 86.154.64.225 23:10, 22 July 2007 (UTC)

"Within specification" does not mean that I, the consumer, know how many dead pixels there are going to be in a new LCD monitor that's in a box or is mail ordered. But I'd agree that this is a particularly poor example, it's one of the few things a consumer who's buying a used computer face to face can determine for themselves (maybe not an absolute count, but a sufficient "this one is good enough for me" determination).

But things like "how much life do it's disk drive/fans/capacitors have" is not something anyone can really determine (except in that most consumer systems have a design life of three years, but you have no idea how abused (heat, shock/vibration) a computer you're buying was, and while you can use a S.M.A.R.T monitoring program to figure out how long the disk drive has been powered up, that's way beyond most "techies", let along consumers).

I can't yet make it "encyclopedic", but after a suggestion on Slashdot, it's blindingly obvious that the market for computer programmers is a "Market for Lemons". This theory (as explained in this article) covers pretty much everything that I and many others have been thinking about for years---and it's no surprise economists have a theory to fit it.... Hga 12:26, 7 August 2007 (UTC)

[edit] no market in used computers??

with the net effect of a non-existent or low-quality used computer market

Eh, a quick look at eBay as well as my experience bying second-hand computer every year clearly show that there exists a good market. Who invented the claim?? That would make an interesting positive example; I think the reasons are that many computers indeed come with 30-day warranty and enough buyers are computer specialists to ensure that consumers can't be all fooled. 125.234.4.52 04:05, 22 August 2007 (UTC)

[edit] Seller has incomplete information

There's an article here which makes a number of critiques of this article as of roughly this revision. One of the points which hasn't been addressed is the treatment of the situation in which the seller has less information than the buyer (the reverse of the classic "lemon" situation). The examples of the dearth of formal credit markets in developing countries and the unavailability of health insurance for the elderly would appear to be in this category. According to [1], both of these examples are from Akerlof's paper. I tried rewriting these sections, but I'm not sure I would get it right. Perhaps someone who knows this area of economics better, and/or has more time to read the papers involved, could tackle it. Kingdon (talk) 05:59, 4 February 2008 (UTC)