Re: [tlug] Open-source Japan

["Stephen J. Turnbull" <stephen@example.com>]

Gernot Hassenpflug writes:

 > I.e., A lemon's market? (BTW thanks Prof. Turnbull for pointing out
 > that "the market itself is one such kind of service" in an earlier
 > post. I'd be interested to hear what kind of environment is required
 > to obtain such a market, and what are the best methods to allow such a
 > market to change to a different type.

I'm not sure what you're asking.

 > Hmm, just a wild thought: if rule of law, high regard for private
 > property rights, and voluntary exchange (use of force basically
 > abrogated) allow, with enough effort expended, all true information to
 > be eventually found out, then could one expect, in the long run, that
 > entrpreneurs will expend rationally as much resources to obtain truth
 > as they feel is warranted (cost/benefit-wise).

That's true even if not all information can be discovered (of course
if some relevant information remains hidden, there is some
inefficiency).  However, because information is asymmetrically
distributed, it turns out that one often needs a "neutral broker" to
handle the information exchanges (ie, to get the truth-telling
equilibrium that Curt and Niels claim exists, but in fact usually only
exists in an artificial environment).  That neutral broker could be
the government or a private sector mediator/arbitrator.  (I hasten to
add that *real* mediation/arbitration looks nothing like these
artificial environments, not even if you squint and tilt your head
sideways.)

In the end we are stuck with a choice among many alternative
"solutions", but all of them are "second-best".