Tag

market_failure

2 findings

Economics (general)Asymmetric Information and Lemons Market Failure in Advisory Services100% of candidate firms regularly received low-quality unsolicited sales offers, leading directors to reject market-rate consulting despite an estimated 130% one-year return on investment ($325,000 annual profit increase on a $250,000 investment).Expert Theory Finance & microfinanceMicrocredit Asymmetric Information Market FailureMicrofinance institutions require charging a 38% APR (up from 17.5% baseline) to break even under adverse selection. No zero-profit separating equilibrium exists if moral hazard elasticity exceeds 0.46, leaving regular rigid contracts as constrained efficient for lenders.Expert Theory