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Social Science

Posted: Tue Mar 08, 2011 2:37 pm
by Tanay
I guess I'll get this one started, mostly because I was confused about one of the bonuses in the set.
11. George Akerloff posed this example to explain why the owners of good used cars would be unable to sell them at a fair price. For 10 points each:
[10] Identify this situation in which buyers’ uncertainty about the quality of cars causes them to become less willing to pay a given price for any used car.
ANSWER: the market for lemons (accept anything that mentions lemons)
I don't think "the market for lemons" should actually be described as a situation, as it's only the title of an important paper about the topic (information asymmetry), and the actual phrase "market for lemons" doesn't actually come up in the paper itself (besides the title, as far as I remember). Though I was glad to see it come up, I feel like this might have thrown teams off by prompting them to say "information asymmetry" for the first part, as I ended up doing.

Re: Social Science

Posted: Tue Mar 08, 2011 3:02 pm
by cchiego
Ah that's a good catch- should've had the part on information asymmetry come first or at least prompted on that (though it did say "example" in the lead-in). I thought Akerloff would be too difficult for a separate part entirely and I'd definitely heard of the "Market for Lemons" outside of that specific paper (it seems to be a fairly common example of asymmetric info in econ textbooks), plus it's a fairly memorable phrase. But I hope in the future that we'll get more interesting micro-econ questions like this instead of the standard litany of macroecon named laws/curves.