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I don’t understand. If you sell the car, you get money which has the maximum utility, because you can trade it for other things. Donating and trading are essent
by jonathankoren 8y ago
I don’t understand. If you sell the car, you get money which has the maximum utility, because you can trade it for other things. Donating and trading are essentially selling, so what would an alternative that provides positive utility look like?
- darkerside 8y agoThey are alternatives to selling, but you typically receive less money than you would in a straight sale. I think I'm asking the same question as you. > Given the fixed price at which buyers will buy, sellers will sell only when they hold "lemons" (since plemon < pavg) and they will leave the market when they hold "peaches" (since ppeach > pavg). My point is that this is a highly idealized and theoretical model. Life doesn't work this way.
- jonathankoren 8y agoI would argue that the alternatives you've listed (e.g. donation), are functionally equivalent to selling. You're trading a good (the car), for money. > My point is that this is a highly idealized and theoretical model. Life doesn't work this way. Such is every nonbehavioral economics paper ever written.
- darkerside 8y agoYou're missing my point. Those alternatives typically provide you LESS money than selling. How are people supposedly "leaving" the market? Parking an unused car on the street?