Good guys sleaze ball’s and jerks- The lemon theory.

In August 1970 George Akerlof published an article titled: The market for “Lemons” Quality Uncertainty and the Market Mechanism. This work was to fetch him the Nobel prize in economics in 2001. I came across this theory and the term “Lemon’s”- a slang used in the U S to refer to second hand cars of poor quality, in the first term in economics and came across it again in the last term in corporate finance.
Asymmetry of information about a particular product between the seller and the buyer formed the basis of the lemon theory.
In essence the theory states that sellers of bad quality goods have the incentive to sell off their goods to buyers at good quality goods prices. But since there is an asymmetry of information i.e. the buyer does not know whether the product being offered is good or a “lemon” he will assume that the product being offered is a “lemon” and will offer a lemony price which would drive the good out of the market. In fact this will proceed to such an extent that eventually there would be no market left at all.
This is a theory of economics but in the original paper George A. Akerlof gives an example of the employment of minorities which makes me believe that this principle applies to real life situations as well, an example of this is our political system. As more and more corrupt and criminal people join politics the honest people start leaving politics and governance and turn to the private sector which is theoretically a market with symmetrical information. In his paper Akerlof stated that things such as branding would increase the credibility of the seller’s and would tackle the asymmetry of information. A similar situation is seen in politics of our country as well where we see people banking on the Gandhi name again and again as it tells them that this product is not likely to be a lemon.
I routinely see examples of this theory in everyday life, just look around, see in your groups, a stupid moron who speaks a lot in the class or at work will make the smart ones around him go quiet and soon you will see a horde of morons grabbing the light as the smart ones take to the shadows to avoid being compared to these fellows.
A very good example of this was given by our corporate finance professor in class, he used the terminologies of good guys , sleaze balls and jerks. According to him all these three types of men are likely to woo a maiden. The average guy (according to the prof.) is a jerk. As there is asymmetry of information the girl is not aware who is a good guy and who is a sleaze ball. As a result she treats all of them as jerks, which drives the good guys away, now as the quality of the men falls the average falls lesser than the jerks and the girl also starts treating all at that level, which drives away the jerks as well leaving only the sleaze balls, no wonder really good looking women end up getting married to funny looking guys ;) .