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:
“A friend of mine spoke of books that are dedicated like this: “To my wife, by whose helpful criticism ...” and so on. He said the dedication should really read: “To my wife. If it had not been for her continual criticism and persistent nagging doubt as to my ability, this book would have appeared in Harper’s instead of The Hardware Age.””
—Brenda Ueland (1891–1985)
“Like speaks to like only; labor to labor, philosophy to philosophy, criticism to criticism, poetry to poetry. Literature speaks how much still to the past, how little to the future, how much to the East, how little to the West.”
—Henry David Thoreau (1817–1862)
“In criticism I will be bold, and as sternly, absolutely just with friend and foe. From this purpose nothing shall turn me.”
—Edgar Allan Poe (1809–1845)