Enrichment
Market Failure and Akerlof’s Lemons
Simon Wakerley
25th February 2016
One of the key factors to cause a market to fail is a lack of information.
George Akerlof was awarded the Nobel Prize in economics for his work on the second hand car market. He observed how asymmetrical information between buyers and sellers affected the market price of second hand cars and with that the number of sales made.
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