Criticism
Criticism for this theory stems from the fact that it ignores the fact that consumers themselves can seek ways to assure the quality of a car and that a used-car salesperson may work to maintain his reputation rather than pass off a "lemon". The issue of reputation, however, would not apply to private individual sellers who do not intend to sell another car in the near future.
Libertarians like William L. Anderson oppose the regulatory approach proposed by the authors of the paper, observing that some used-car markets haven't broken down even without lemon legislation and that the lemon problem creates entrepreneurial opportunities for alternative marketplaces or customers' knowledgeable friends.
The "used car" scenario is intended as an allegory meant to illustrate an idea; and not as a literal statement concerning the actual business of car sales or any real-life individuals and companies engaged in such a business.
Read more about this topic: The Market For Lemons
Famous quotes containing the word criticism:
“As far as criticism is concerned, we don’t resent that unless it is absolutely biased, as it is in most cases.”
—John Vorster (1915–1983)
“When you overpay small people you frighten them. They know that their merits or activities entitle them to no such sums as they are receiving. As a result their boss soars out of economic into magic significance. He becomes a source of blessings rather than wages. Criticism is sacrilege, doubt is heresy.”
—Ben Hecht (1893–1964)
“It is the will of God that we must have critics, and missionaries, and Congressmen, and humorists, and we must bear the burden. Meantime, I seem to have been drifting into criticism myself. But that is nothing. At the worst, criticism is nothing more than a crime, and I am not unused to that.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)