1.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.
Or private institutions may arise to take advantage of the potential increases in welfare which can accrue to all parties. By nature, however, these institutions are nonatomistic, and therefore concentrations of power - with ill consequences of their own can develop.
1.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.
是说市场中商品的平均质量下降,即次品越来越多;同时,市场萎缩,即交易的商品数量也越来越少!
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.
Or private institutions may arise to take advantage of the potential increases in welfare which can accrue to all parties. By nature, however, these institutions are nonatomistic, and therefore concentrations of power - with ill consequences of their own can develop.