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by jjmarr·2y ago·view on hn ↗
> The theory that the removal of lemon laws would result in a more informed consumer base has no basis in reality.

That's not what the paper says. It proposes government intervention and predates many lemon laws.

> Hoping consumers will educate themselves is a solution that doesn't scale; it is unrealistic to expect consumers to become experts on cars, computers, phones, medical devices, and every other complex product just so they can avoid being sold inferior, broken products.

This is the core claim of the original paper. When buyers have information asymmetry relative to sellers, they suffer.

> It is clear that the only solution that works is for experts on products, i.e. the sellers, be held accountable when they knowingly sell low quality products as if they were high quality.

This is literally what a lemon law is and what you're saying is on page 1 of the Market for Lemons paper.

> There are many markets in which buyers use some market statistic to judge the quality of prospective purchases. In this case there is incentive for sellers to market poor quality merchandise, since the returns for good quality accrue mainly to the entire group whose statistic is affected rather than to the individual seller. As a result there tends to be a reduction in the average quality of goods and also in the size of the market. It should also be perceived that in these markets social and private returns differ, and therefore, in some cases, governmental intervention may increase the welfare of all parties