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I think the "market for lemons" analogy is needlessly complicating this because that's an incorrect analogy IMHO. If it was the case that peaches can't be prod
by thecrazyone 9y ago
I think the "market for lemons" analogy is needlessly complicating this because that's an incorrect analogy IMHO.
If it was the case that peaches can't be produced at prices a customer is willing to pay, then the market splits to high-end and low-end with two types of customers with different paying ability like in high end cars (think mercs and rolls royces).
A customer might have information asymmetry but isn't stupid (is this overtly harsh?).
To quote my own comment in a parallel thread here: "wouldn't a middle man who tests cars try and separate the lot and charge for his services?". The market for lemons seems model a static market which is not realistic IMHO