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In markets for experience or credence goods adverse selection can drive out higher quality products and services. This negative implication of asymmetric information about product quality for trading and welfare, poses the question of how such markets first originate. We consider a market in...
Persistent link: https://www.econbiz.de/10010584447
Since Akerlof's (1970) seminal paper the existence of adverse selection due to asymmetric information about quality is well-understood. Yet two questions remain. First, given the negative implications for trading and welfare, how do such markets come into existence? And second, why have many...
Persistent link: https://www.econbiz.de/10005036230
Persistent link: https://www.econbiz.de/10009737011
Persistent link: https://www.econbiz.de/10011574445
In markets for experience or credence goods adverse selection can drive out higher quality products and services. This negative implication of asymmetric information about product quality for trading and welfare, poses the question of how such markets first originate. We consider a market in...
Persistent link: https://www.econbiz.de/10012056333