Market Failure
An annotated collection of 3 papers on market failure, spanning 1970 to 1996. Featuring works by George A. Akerlof, A. Michael Spence, Kenneth J. Arrow — each with editorial commentary oriented to digital product practice.
The Market for 'Lemons': Quality Uncertainty and the Market Mechanism
Akerlof's foundational demonstration that information asymmetry alone can destroy a market. Using the used car trade as his model — where sellers know whether a car is good or a "lemon" but buyers cannot tell — he shows…
Job Market Signaling
Spence's canonical model of how agents in markets with asymmetric information use costly signals to reveal their type. The original setting is the labour market: employers cannot observe worker productivity before hiring…
The Economics of Information: An Exposition
Arrow, the Nobel laureate who formalised the economics of uncertainty and information asymmetry, distills his life's work into a short exposition. The central argument is that markets for information do not behave like m…