The Market for Lemons

“The Market for Lemons: Quality Uncertainty and the Market Mechanism” is a 1970 paper by the economist George Akerlof. More info at wikipedia and here.

This post is related to an email of an unhappy buyer of some of my stuff. I’m selling my furniture at half price from the cost, they have about 4/5 years of usage, mostly are in good condition. Half-price is something that people pay for getting something in second hand but, it is true, there are lemons and cherries. As in most of the cases, people in second hand market are not willing to pay more than the price of new in market (even if the old item is likely a cherry). Because of this I find my self in the constraint of selling cherries under priced and lemons over priced.

I’m sure Eva is selling much more cherries than lemons and buyers are very happy, but in my case is maybe half/half. Anyway, I’m not being a cheater and furniture I know not to worth the half price – mainly things I would change if staying here -, those I sell at 20% of the price (like my bed) or even for free. Others, like my microwave, I find difficult to find a buyer. It is a cherry and because of that is more expensive than some new items in the lemon market (of new stuff).

Well, enough of economics writing today. I hope not to make other buyers unhappy, but at same time market is based on making compromises. If it is not possible to sell my cherries at fair price, then I feel I should compensate with some lemons.