Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84 (Fortune 01.1b1); site graffiti.UUCP Path: utzoo!linus!philabs!cmcl2!seismo!ut-sally!ut-ngp!shell!graffiti!peter From: peter@graffiti.UUCP (Peter da Silva) Newsgroups: net.politics.theory Subject: Re: The free market Message-ID: <387@graffiti.UUCP> Date: Sat, 2-Nov-85 06:17:21 EST Article-I.D.: graffiti.387 Posted: Sat Nov 2 06:17:21 1985 Date-Received: Tue, 5-Nov-85 04:48:09 EST References: <225@gargoyle.UUCP> Distribution: net Organization: The Power Elite, Houston, TX Lines: 27 > "[Akerlof] argued that the seller of a used car knows whether or not > it is a lemon; the buyer has to play the averages, knowing only that > some cars are lemons but not whether the particular car he's buying > is. Buyers will pay only a price that reflects the average frequency > of lemons in the used-car crop. That average is a high price for a > lemon but understates the worth of the better cars offered on the > market. The owners of the better cars are reluctant to sell at a > price that makes allowance for the lemons that other people are > selling; so the better cars appear less frequently on the market and > the average frequency of lemons increases. As customers learn this, This is preposterous. It totally ignores one little fact... the value of a used car (or anything else, for that matter) is what people will pay for it. Not some arbitrary "worth". In addition, what are the owners going to do with their old cars that they're now "reluctant to sell"? Presumably they're selling them because they (1) need the money or (2) want to buy a new car. Are they going to stick them in their backyards for the kids to play in or something equally absurd? If this is the sort of argument that people on this board even consider meaningful I'm ashamed of the lot of you, libertarians and liberals alike! No, I'm not telling you which I am. -- Name: Peter da Silva Graphic: `-_-' UUCP: ...!shell!{graffiti,baylor}!peter IAEF: ...!kitty!baylor!peter