Quality Differentials and Prices: Are Cherries Lemons?

A-Tier
Journal: Journal of Industrial Economics
Year: 1991
Volume: 39
Issue: 6
Pages: 649-58

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In G. A. Akerlof's market for lemons, goods of differential qualities sell under the same standard. If no price differentials exist, then the low quality goods drive out the high quality goods. In cherry markets, heterogeneous lots of cherries sell within the same market standard. At the time of sale, buyers know only the market standard. Since different qualities sell under the same standard, the potential for lemons exists if buyers cannot identify different qualities. The authors' theoretical and empirical models suggest seller characteristics signal quality to buyers, and buyers pay premiums to firms with these characteristics. Thus, cherries are not lemons. Copyright 1991 by Blackwell Publishing Ltd.

Technical Details

RePEc Handle
repec:bla:jindec:v:39:y:1991:i:6:p:649-58
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-29