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FIFTH RULE OF IMPERFECTION: The fifth of seven basic rules of the economy. It is the observation that the real world is not perfect. This means markets often fail to achieve efficiency because of several failings. This also means that government seldom enacts the policies needed to correct market failings. We are usually faced with the lesser of evils.
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ADVERSE SELECTION An inefficient, bad, or adverse outcome of a market exchange that results because buyers and/or sellers make decisions based on asymmetric information. This commonly results in a market that exchanges a lesser quality good, what is termed the market for lemons. Two related problems resulting from asymmetric information are moral hazard and the principal-agent problem. Two methods of lessoning the problem of adverse selection are signalling and screening.
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YELLOW CHIPPEROON
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Today, you are likely to spend a great deal of time at an auction seeking to buy either storage boxes for your winter clothes or several magazines on time travel. Be on the lookout for slightly overweight pizza delivery guys.
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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"Do not wait; the time will never be just right " -- Napoleon Hill, author
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