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The Market for Lemons: Quality Uncertainty and the Market Mechanism George A. Akerlof The Quarterly Journal of Economics, Vol. 84, No. 3. (Aug., 1970), pp. 488-500.
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The individuals in this market buy a new automobile without knowing whether the car they buy will be good or a lemon. But they do know that with probability q it is a good car and with probability (1-q) it is a lemon; by assumption, q is the proportion of good cars produced and (1 - q) is the proportion of lemons.
"The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" 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 .
Nov 14, 2003 · Writing the “The Market for ‘Lemons'”: A Personal Interpretive Essay. by George A. Akerlof 2001 laureate in economic sciences. I wrote “The Market for ‘Lemons,'” (a 13-page paper for which I was awarded the Prize in Economics) during my first year as assistant professor at Berkeley, in 1966-67.
Aug 1, 1970 · George A. Akerlof, The Market for “Lemons”: Quality Uncertainty and the Market Mechanism, The Quarterly Journal of Economics, Volume 84, Issue 3, August 1970, Pages 488–500, https://doi.org/10.2307/1879431
- George A. Akerlof
- 1970
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market.
George A. Akerlof. Edited by. Victor P. Goldberg. Chapter. Get access. Cite. Summary. There are many markets in which buyers use some market statistic to judge the quality of prospective purchases.
