Homines libenter quod volunt credunt
Posted in Institutions, Market Failures, You Can't Have it Both Ways on Feb 27th, 2013
Perhaps the most sophisticated argument that markets “fail” is that two parties to a transaction are rarely privy to the same information (you can write down a problem where total ignorance is better than partial ignorance for market outcomes). In the presence of information asymmetries you would expect certain parties to be driven from the […]
Posted in Economics Problems, Institutions on Mar 2nd, 2010
George Akerlof’s canonical example of the market for lemons (information asymmetries leading to unraveling in free markets with subsequent welfare losses) seems to be a perfect illustration of the problem of asymmetric information. Ironically, just as what has happened in the canonical descriptions of public goods problems (lighthouses and honey bees), market power (oil cartels), […]
Posted in Education on Aug 28th, 2009
Shameless self-promotion alert. The Pope Center has published a dialogue several of us participated in via e-mail over the past few weeks. You can read me talking about the relationship between croaking frogs and undergraduate students.
