Criteria
A lemon market will be produced by the following:
- Asymmetry of information, in which no buyers can accurately assess the value of a product through examination before sale is made and all sellers can more accurately assess the value of a product prior to sale
- An incentive exists for the seller to pass off a low quality product as a higher quality one
- Sellers have no credible disclosure technology (sellers with a great car have no way to disclose this credibly to buyers)
- Either a continuum of seller qualities exists or the average seller type is sufficiently low (buyers are sufficiently pessimistic about the seller's quality)
- Deficiency of effective public quality assurances (by reputation or regulation and/or of effective guarantees/warranties)
Read more about this topic: The Market For Lemons
Famous quotes containing the word criteria:
“We should have learnt by now that laws and court decisions can only point the way. They can establish criteria of right and wrong. And they can provide a basis for rooting out the evils of bigotry and racism. But they cannot wipe away centuries of oppression and injustice—however much we might desire it.”
—Hubert H. Humphrey (1911–1978)
“Every sign is subject to the criteria of ideological evaluation.... The domain of ideology coincides with the domain of signs. They equate with one another. Wherever a sign is present, ideology is present, too. Everything ideological possesses semiotic value.”
—V.N. (Valintin Nikolaevic)
“There are ... two minimum conditions necessary and sufficient for the existence of a legal system. On the one hand those rules of behavior which are valid according to the system’s ultimate criteria of validity must be generally obeyed, and on the other hand, its rules of recognition specifying the criteria of legal validity and its rules of change and adjudication must be effectively accepted as common public standards of official behavior by its officials.”
—H.L.A. (Herbert Lionel Adolphus)