The Market for Lemons 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 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 principle applies more specifically to exchange rates, modified analogies can be drawn.) Akerlof considers a situation in which demand "D" for used cars depends on the cars price "p" and quality "µ" = "µ"("p") and the supply depends on price alone. Economic equilibrium is given by "S"("p") = "D"("p","µ") and
Good cop/bad cop Good cop/bad cop "Good cop/bad cop" routine, also called joint questioning or friend and foe, is a psychological tactic used in negotiation and interrogation. "Good cop/bad cop" tactics involve a team of two interrogators who take apparently opposing approaches to the subject. The interrogators may interview the subject alternately or may confront the subject at the same time. The "bad cop" takes an aggressive, negative stance towards the subject, making blatant accusations, derogatory comments, threats, and in general creating antipathy between the subject and himself. This sets the stage for the "good cop" to act sympathetically, appearing supportive and understanding,