The Market for “Lemons”: Quality Uncertainty and the Market Mechanism

  title={The Market for “Lemons”: Quality Uncertainty and the Market Mechanism},
  author={George A. Akerlof},
  journal={Quarterly Journal of Economics},
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. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs… 

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