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Experimental Studies of Markets with Buyers Ignorant of Quality Before Purchase: When do "Lemons" Drive out High Quality Products? A Report to the Federal Trade Commission

Lynch, Michael and Miller, Ronald L. and Plott, Charles R. and Porter, Russell (1986) Experimental Studies of Markets with Buyers Ignorant of Quality Before Purchase: When do "Lemons" Drive out High Quality Products? A Report to the Federal Trade Commission. Federal Trade Commission , Washington, D.C.. http://resolver.caltech.edu/CaltechAUTHORS:20140325-114643079

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Abstract

Experiments indicated that if sellers could not develop reputations for poor quality, then the market would consist entirely of poor quality products. The need to attract re-purchase is not sufficient incentive to have the seller build a reputation for supplying good quality, while the imposition of a requirement for truthful advertising or labelling is sufficient.


Item Type:Report or Paper (Report)
Related URLs:
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http://www.ftc.gov/reports/experimental-studies-markets-buyers-ignorant-quality-purchase-when-do-lemons-drive-out-highPublisherReport
Additional Information:The authors would like to thank Gerry Butters for help in designing the original pilot experiments, Louis Wilde for advice during the early experiments and Richard Craswell for detailed comments on the interpretation and presentation of the results. We are also in debt to Pamela Armiger for putting the manuscript in final form. Any remaining errors we intend to blame on her.
Record Number:CaltechAUTHORS:20140325-114643079
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20140325-114643079
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44500
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:18 Apr 2014 18:21
Last Modified:18 Apr 2014 18:21

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