Chapter 5 The Robustness of Lemons in Experimental Markets

In this chapter, the authors conduct a robustness study for the classic experimental results of Lynch, Miller, Plott, and Porter ( 1986 , 1991 ). The authors find strong support for the original hypotheses in an updated experimental marketplace, consisting of dichotomous product qualities, non-binding signals of product quality, fixed seller identifiers, and an end-point design of deliberate ambiguity. The authors show that fixed identifiers alone are not sufficient devices to support efficient outcomes in these updated market conditions.