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| {{ref improve|date=August 2012}}
| | Quick weight loss diets have been about because the world's first dieter looked at their abdomen and thought, "I have to lose a few pounds - NOW." Even though experience has shown which quick "fad" diets usually result in temporary weight reduction, dieters are nevertheless looking for the Holy Grail: A diet which lets them lose fat fast and keep it off.<br><br>It is wise [http://safedietplansforwomen.com/bmr-calculator bmr calculator] to have a superior scale to weigh on. I weigh everyday, however you could not wish To. I merely can't seem to help me, and since I track it found on the Calorie-Count url, it's something that I am excited to do daily.<br><br>We are all subject to what exactly is called the basal metabolic rate. This really is the number of calories every living individual demands to survive. It is based on the amount of calories required to keep the organs functioning. Even strolling to the refrigerator for several tempting snack or a cold one, plus then back to the sofa for the upcoming TV show will be considered 'exercise' whenever computing your BMR. It is the amount of calories you'll burn when you remain inside bed all day long and do nothing.<br><br>We've all heard the stories of celebrities that drank nothing yet lemonade with maple syrup plus cayenne pepper to immediately slim down for a part. What you don't hear about is the aftermath: Those same celebrities regained all fat as soon as they ended their fast weight loss diets.<br><br>Another advantage of gaining lean muscle mass is the fact that metabolically this type of tissue requires more stamina so your bmr actually increases because a outcome of getting better lean muscle. Burning more calories whilst at rest refuses to sound too bad, does it?<br><br>Calories are not the enemy, although to a dieter, sometimes it may appear that way! We require calories to keep the body functioning properly. The calories you consume in foods you eat are converted into power by the bodies. This helps us to do everyday activities, like walking, moving, plus even sitting. It is just whenever we take inside more calories than we require plus don't compensate for this by increasing your exercise that calories become the bad guy. If you take in too numerous calories and don't increase your activity level, the excess calories the body does not require for vitality is stored as fat in the body. If you eat 3500 more calories than what your body demands, we will gain one pound of body weight. If you burn 3500 calories more than what you've consumed, you'll lose 1 pound of body weight.<br><br>I may hear the gears grinding in the background. Screeching even! Am I suggesting which you today have to commence counting calories plus journaling what we eat each day? Well, that is one method to make certain that a eating lower than the daily calorie requirement. But go and visit the third installment of this series plus see how to easily find the BMR and begin utilizing this useful information. Remember, this BMR-thing enabled me to beat childhood obesity whilst the principles behind it have aided me keep a pretty healthy, balanced fat for over fifteen years. I have never been a big calorie counter either. Once you receive severe and begin paying attention to what your body requirements, good behavior easily follow I promise! |
| [[File:Used car dealers on the Industrial Estate - geograph.org.uk - 766208.jpg|thumb|right|220px|Akerlof's paper uses the [[market]] for [[used cars]] as an example of the problem of quality uncertainty. It concludes that owners of good cars will not place their cars on the used car market. This is sometimes summarized as "the bad driving out the good" in the market.]]
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| '''"The Market for Lemons: Quality Uncertainty and the Market Mechanism"''' is a 1970 paper by the economist [[George Akerlof]]. It discusses [[information asymmetry]], which occurs when the seller knows more about a product than the buyer. A [[lemon (car)|lemon]] is an American slang term for a car that is found to be defective only after it has been bought. Akerlof, [[Michael Spence]], and [[Joseph Stiglitz]] jointly received the [[Nobel Memorial Prize in Economic Sciences]] in 2001 for their research related to asymmetric information. Akerlof's paper uses the [[market]] for [[used cars]] as an example of the problem of quality uncertainty. It concludes that owners of good cars will not place their cars on the used car market. This is sometimes summarized as "the bad driving out the good" in the market.
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| ==Thesis==
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| [[File:Kovacs special 1968.JPG|thumb|right|220px|A used car dealer with a low-priced used car.]]
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| Akerlof's paper uses the [[market (economics)|market]] for [[used car]]s as an example of the problem of quality uncertainty. A used car is one in which ownership is transferred from one person to another, after a period of use by its first owner and its inevitable wear and tear. There are good used cars ("cherries") and defective used cars ("lemons"), normally as a consequence of several not-always-traceable variables such as the owner's driving style, quality and frequency of maintenance and accident history. Because many important mechanical parts and other elements are hidden from view and not easily accessible for inspection, the buyer of a car does not know beforehand whether it is a cherry or a lemon. So the buyer's best guess for a given car is that the car is of average quality; accordingly, he/she will be willing to pay for it only the price of a car of known average quality. This means that the owner of a carefully maintained, never-abused, good used car will be unable to get a high enough price to make selling that car worthwhile.
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| Therefore, owners of good cars will not place their cars on the used car market. The withdrawal of good cars reduces the average quality of cars on the market, causing buyers to revise downward their expectations for any given car. This, in turn, motivates the owners of moderately good cars not to sell, and so on. The result is that a market in which there is [[information asymmetry|asymmetric information]] with respect to quality shows characteristics similar to those described by [[Gresham's Law]]: the bad drives out the good (although Gresham's Law applies more specifically to exchange rates, modified analogies can be drawn).
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| ==Statistical abstract of the problem==
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| [[File:The Larches - geograph.org.uk - 1623795.jpg|thumb|right|220px|A used car dealer.]]
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| Suppose we can use some number, <math>q</math> to index the quality of used cars, where <math>q</math> is uniformly distributed over the interval [0,1]. The average quality of a used car which could be supplied to the market is therefore 1/2. There are a large number of buyers looking for cars who are prepared to pay their [[reservation price]] of <math>\tfrac 3 2 q</math> for a car that is of quality <math>q</math>. There are also a large number of sellers who are prepared to sell a car of quality <math>q</math> for the price <math>q</math>. If quality were observable, the price of used cars would therefore be somewhere between <math>q</math> and <math>\tfrac 3 2 q</math>, and the cars would be sold and everyone would be perfectly happy. If the quality of cars is not observable by the buyers, then it seems reasonable for them to estimate the quality of a car offered to market using the average quality of all cars.
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| Based on this estimation, the willingness to pay for any given car will therefore be <math>\tfrac 3 2 q_\text{avg}</math>, where <math>q_\text{avg}</math> is the average quality of all the cars. Now, assume that the equilibrium price in the market is some price, <math>p</math>, where <math>p > 0</math>. At this price, all the owners of cars with quality less than <math>p</math> will want to offer their cars for sale. Since again, quality is uniformly distributed over the interval from 0 to this <math>p</math>, the average quality of the cars offered for sale at <math>p</math> will be worth only <math>p/2</math>. We know however that for an expected quality worth <math>p/2</math>, buyers will only be willing to pay <math>(3/2)(p/2) = \tfrac 3 4 p</math>. Therefore we can conclude that no cars will be sold at <math>p</math>. Because <math>p</math> is any arbitrary positive price, it is shown that no cars will be sold at any positive price at all. The market for used cars collapses when there is asymmetric information.
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| ==Asymmetric information==
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| [[File:Flickr - ronsaunders47 - The Vauxhall Victor FB Series UK 1964..jpg|thumb|right|220px|A used car on display.]]
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| The paper by Akerlof describes how the interaction between quality heterogeneity and [[information asymmetry|asymmetric information]] can lead to the disappearance of a market where guarantees are indefinite. In this model, as quality is undistinguishable beforehand by the buyer (due to the asymmetry of information), incentives exist for the seller to pass off low-quality goods as higher-quality ones. The buyer, however, takes this incentive into consideration, and takes the quality of the goods to be uncertain. Only the average quality of the goods will be considered, which in turn will have the side effect that goods that are above average in terms of quality will be driven out of the market. This mechanism is repeated until a [[no-trade equilibrium]] is reached.
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| As a consequence of the mechanism described in this paper, markets may fail to exist altogether in certain situations involving quality uncertainty. Examples given in Akerlof's paper include the market for used cars, the dearth of formal credit markets in developing countries, and the difficulties that the elderly encounter in buying health insurance. However, not all players in a given market will follow the same rules or have the same aptitude of assessing quality. So there will always be a distinct advantage for some vendors to offer low-quality goods to the less-informed segment of a market that, on the whole, appears to be of reasonable quality and have reasonable guarantees of certainty. This is part of the basis for the idiom, [[buyer beware]].
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| This is likely the basis for the idiom that an [[informed consumer]] is a better consumer. An example of this might be the subjective quality of fine food and wine. Individual consumers know best what they prefer to eat, and quality is almost always assessed in fine establishments by smell and taste before they pay. That is, if a customer in a fine establishment orders a lobster and the meat is not fresh, he can send the lobster back to the kitchen and refuse to pay for it. However, a definition of 'highest quality' for food eludes providers. Thus, a large variety of better-quality and higher-priced restaurants are supported.
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| ==Critical reception==
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| [[File:1987 Yugo GV - Flickr - skinnylawyer.jpg|thumb|right|200px|A used car for sale.]]
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| George E. Hoffer and Michael D. Pratt state that the “economic literature is divided on whether a lemons market actually exists in used vehicles." The authors’ research supports the hypothesis that “known defects provisions,” used by US states (e.g., Wisconsin) to regulate used car sales have been ineffectual, because the quality of used vehicles sold in these states is not significantly better than the vehicles in neighboring states without such consumer protection legislation.<ref name="Hoffer1987">{{ cite journal | last = Hoffer | first = George E. | authorlink = | coauthors = Pratt, Michael D. | year = 1987 | month = | title = Used vehicles, lemons markets, and Used Car Rules: Some empirical evidence | journal = Journal of Consumer Policy | volume = 10 | issue = 4 | pages = 409–414 | doi = 10.1007/BF00411482 | url = }}</ref>
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| Both the ''[[American Economic Review]]'' and the ''[[Review of Economic Studies]]'' rejected the paper for "triviality," while the reviewers for ''[[Journal of Political Economy]]'' rejected it as incorrect, arguing that if this paper was correct, then no goods could be traded.<ref>{{cite journal |last=Gans |first=Joshua S. |first2=George B. |last2=Shepherd |year=1994 |title=How Are the Mighty Fallen: Rejected Classic Articles by Leading Economists |journal=[[Journal of Economic Perspectives]] |volume=8 |issue=1 |pages=165–179 |doi=10.1257/jep.8.1.165 }}</ref> Only on the fourth attempt did the paper get published in ''[[Quarterly Journal of Economics]]''.<ref>[http://nobelprize.org/nobel_prizes/economics/laureates/2001/akerlof-article.html Writing the <!--sic;the extra "the" is in the source--> “The Market for ‘Lemons’”: A Personal and Interpretive Essay] by George A. Akerlof</ref> Today, the paper is one of the most-cited papers in modern economic theory (more than 8,530 citations in academic papers as of May 2011),<ref>{{cite web |url=http://scholar.google.de/scholar?cites=8622278700871890196&as_sdt=5,24&sciodt=0,24&hl=en&num=100 |title=Citations of Akerlof: The Market for Lemons: Quality Uncertainty and the Market Mechanism |accessdate=2011-05-27 |work=[[Google Scholar]] |publisher= |date= }}</ref> and has profoundly influenced virtually every field of economics, from industrial organisation and public finance to macroeconomics and contract theory.
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| ==Criteria==
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| A lemon market will be produced by the following:
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| # Asymmetry of information, in which no buyers can accurately assess the value of a product through examination before sale is made and all sellers can more accurately assess the value of a product prior to sale
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| # An incentive exists for the seller to pass off a low-quality product as a higher-quality one
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| # Sellers have no credible disclosure technology (sellers with a great car have no way to disclose this credibly to buyers)
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| # Either a continuum of seller qualities exists or the average seller type is sufficiently low (buyers are sufficiently pessimistic about the seller's quality)
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| # Deficiency of ''effective'' public quality assurances (by reputation or regulation and/or of ''effective'' guarantees/warranties)
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| ==Impact on markets==
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| The article draws some conclusions about the cost of dishonesty in markets in general:
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| {{cquote|The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.}}
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| ==Laws in the United States==
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| Five years after Akerlof's paper was published, The United States enacted a federal "lemon law" (the [[Magnuson–Moss Warranty Act]]) that protects citizens of all states. There are also state laws regarding "lemons" which vary by state and may not necessarily cover used or leased vehicles. The rights afforded to consumers by "lemon laws" may exceed the warranties expressed in purchase contracts. These state laws provide remedies to consumers for automobiles that repeatedly fail to meet certain standards of quality and performance. "Lemon law" is the common nickname for these laws, but each state has different names for the laws and acts, which may also cover more than just automobiles. In California and federal law, "Lemon Laws" cover anything mechanical.
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| The federal "lemon law" also provides the warrantor may be obligated to pay your attorney fees if you prevail in a lemon {{Not a typo|law suit}}, as do most state lemon laws. If a car has to be repaired for the same defect four or more times and the problem is still occurring, the car may be deemed to be "a lemon." The defect must substantially hinder the vehicle's use, value or safety. Purchasers who knowingly purchase a car in "as is" condition accept the defects and void their rights under the "lemon law".
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| ==Criticism==
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| Criticism for this theory stems from the fact that it ignores the fact that consumers themselves can seek ways to assure the quality of a car and that a used-car salesperson may work to maintain his reputation rather than pass off a "lemon". The issue of reputation, however, would not apply to private individual sellers who do not intend to sell another car in the near future.
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| [[Libertarianism|Libertarians]] like [[William L. Anderson]] oppose the regulatory approach proposed by the authors of the paper, observing that some used-car markets haven't broken down even without lemon legislation and that the lemon problem creates entrepreneurial opportunities for alternative marketplaces or customers' knowledgeable friends.<ref>Lemons and the Nobel Prize http://mises.org/story/801</ref>
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| ==See also==
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| *[[Highest quality is lowest cost]]
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| *[[Adverse selection]]
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| * [[Confusopoly]]
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| *[[Death spiral (insurance)]]
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| *[[Tragedy of the commons]]
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| * [[Transparency (market)]]
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| * [[Open data]]
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| ==References==
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| {{Reflist}}
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| ==Further reading==
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| *{{cite journal |last=Akerlof |first=George A. |authorlink= |coauthors= |year=1970 |month= |title=The Market for 'Lemons': Quality Uncertainty and the Market Mechanism |journal=Quarterly Journal of Economics |volume=84 |issue=3 |pages=[http://hydrogen.its.ucdavis.edu/eec/education/EEC–classes/eeclimate/class–readings/akerlof–the%20market%20for%20lemons.pdf 488–500.]|publisher=The MIT Press |doi=10.2307/1879431}}
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| ==External links==
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| *[http://courses.temple.edu/economics/Econ_92/Game_Lectures/11th-Lemons/market_for_lemons.htm The Market for Lemons: The Good, the Bad and the Ugly]
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| {{DEFAULTSORT:Market For Lemons, The}}
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| [[Category:1970 works]]
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| [[Category:Market failure]]
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| [[Category:Economics papers]]
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| [[Category:Asymmetric information]]
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| [[Category:Works originally published in the Quarterly Journal of Economics]]
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| [[Category:Works about information]]
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Quick weight loss diets have been about because the world's first dieter looked at their abdomen and thought, "I have to lose a few pounds - NOW." Even though experience has shown which quick "fad" diets usually result in temporary weight reduction, dieters are nevertheless looking for the Holy Grail: A diet which lets them lose fat fast and keep it off.
It is wise bmr calculator to have a superior scale to weigh on. I weigh everyday, however you could not wish To. I merely can't seem to help me, and since I track it found on the Calorie-Count url, it's something that I am excited to do daily.
We are all subject to what exactly is called the basal metabolic rate. This really is the number of calories every living individual demands to survive. It is based on the amount of calories required to keep the organs functioning. Even strolling to the refrigerator for several tempting snack or a cold one, plus then back to the sofa for the upcoming TV show will be considered 'exercise' whenever computing your BMR. It is the amount of calories you'll burn when you remain inside bed all day long and do nothing.
We've all heard the stories of celebrities that drank nothing yet lemonade with maple syrup plus cayenne pepper to immediately slim down for a part. What you don't hear about is the aftermath: Those same celebrities regained all fat as soon as they ended their fast weight loss diets.
Another advantage of gaining lean muscle mass is the fact that metabolically this type of tissue requires more stamina so your bmr actually increases because a outcome of getting better lean muscle. Burning more calories whilst at rest refuses to sound too bad, does it?
Calories are not the enemy, although to a dieter, sometimes it may appear that way! We require calories to keep the body functioning properly. The calories you consume in foods you eat are converted into power by the bodies. This helps us to do everyday activities, like walking, moving, plus even sitting. It is just whenever we take inside more calories than we require plus don't compensate for this by increasing your exercise that calories become the bad guy. If you take in too numerous calories and don't increase your activity level, the excess calories the body does not require for vitality is stored as fat in the body. If you eat 3500 more calories than what your body demands, we will gain one pound of body weight. If you burn 3500 calories more than what you've consumed, you'll lose 1 pound of body weight.
I may hear the gears grinding in the background. Screeching even! Am I suggesting which you today have to commence counting calories plus journaling what we eat each day? Well, that is one method to make certain that a eating lower than the daily calorie requirement. But go and visit the third installment of this series plus see how to easily find the BMR and begin utilizing this useful information. Remember, this BMR-thing enabled me to beat childhood obesity whilst the principles behind it have aided me keep a pretty healthy, balanced fat for over fifteen years. I have never been a big calorie counter either. Once you receive severe and begin paying attention to what your body requirements, good behavior easily follow I promise!
