2 ideas from George A. Akerlof, each explained in a minute and credited to the original work. Free on Savvy.
When buyers can't tell a good used car from a lemon, they'll only pay a price reflecting the average quality. Owners of great cars refuse to sell that cheap and exit the market, le…
— George A. Akerlof, The Market for "Lemons": Quality Uncertainty and the Market Mechanism
A health insurer rarely knows an applicant's habits as well as the applicant does; a used-car seller knows the car's history far better than any buyer. When one party to a trade ho…
— George Akerlof, The Market for Lemons: Quality Uncertainty and the Market Mechanism