Occupational licensing can then essentially solve a lemons problem.
Looked at from a different perspective--but again one that calls the lemons problems justification into serious question--Carpenter et al.
Even if there are a large number of buyers of high quality products and sellers willing to meet their demand, the existence of the so-called Lemons Problem
can generate markets where low quality goods dominate since providers of high quality goods cannot credibly signal the quality of their products due to the noise from their low quality rivals.
The approach to valuation and the derivation of target prices that we presented in our re-initiation report RUSSIAN BANKS: The Lemons Problem
(released 9 Nov 2011) was based primarily on a stresstest scenario for the sector.
This occurs from the association of a lemons problem
in the issue of new capital (a lemons problem
is the problem of existing information asymmetry in a market).
The use of auction markets to study the various issues associated with the lemons problem
is somewhat novel.
Unfortunately, a simple lemons problem
occurs for pension plans that wish to fund ETIs.
If this happens repeatedly, they stay out of the apple market, so we have a lemons problem
(undersupply of nonrotten apples).
As we outlined in our report The Lemons Problem
, some sectors are now in worse shape than in pre-crisis 1H08.
We stick to the views expressed in our note RUSSIAN BANKS: The Lemons Problem
released 9 Nov 2011.
This morning (9 Nov) we release Russian Banks: The Lemons Problem
in which we reinitiate
2) From this point of view, loans should not be saleable in the capital markets because of lemons problems