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# Market of Lemons

> Written in 1970 by George Akerlof.
>
> Akerlof's theory of the "Market for Lemons" paper applies to markets with information asymmetry, focusing on the used car market. 
>
> Information asymmetry within the market relates to the seller having more information about the quality of the car as opposed to the buyer, creating adverse selection.

## Adverse Selection

> Adverse selection is a phenomenon where, buyers result in buying lower quality goods due to sellers not willing to sell high quality goods at the lower prices buyers are willing to pay.

## Consequence

> This can lead to a market collapse due to the lower equilibrium price and quantity of goods traded in the market than a market with perfect information.

Be careful about pricing, such that you attract not the audience or market that you want. 

## References

* [The Market for Lemons](https://en.wikipedia.org/wiki/The_Market_for_Lemons) in Wikipedia
* [George Akerlof](https://en.wikipedia.org/wiki/George_Akerlof) in Wikipedia


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