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by DanAndersen
3249 days ago
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I also found it interesting how the success of cheaters requires a limited number of interactions (so their opponents don't catch on that they are cheaters). Perhaps that's why certain occupations such as used car salesmen have a reputation for being sleazy -- most people are not buying cars very often and so don't get the chance to get to know an individual seller over the course of many transactions. So while you might know that the corner-store merchant is screwing you and end up avoiding him, the used car salesman has a steady stream of suckers who don't know him. |
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There was a famous-for-its-time story called David Harum, (1899), made into a film in 1915, and a radio serial in the 1950s. Its principle legacy today is the use of the term "horse trading" to mean "underhanded dealing".
https://en.m.wikipedia.org/wiki/David_Harum
I'd run across it via H.L. Mencken's essay, "Bayard v. Lionheart", itself best recalled for its concluding sentence:
As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron.
... but containing oh so much more, in the foil of a critique of the 1926 U.S. Presidential Election. Really, read it:
http://amomai.blogspot.com/2008/10/hl-mencken-bayard-vs-lion...
Both used cars and horses have several characteristics in common:
* They are anti-commodities. That is, individual items for sale are highly disuniform, complex, and not readily assessed.
* They are expensive. For the ordinary consumer, they are not purchases likely to be made frequently. (A horse and a car each have fairly equivalent useful working lives: about 3-10 years, depending on use and care afforded.)
* Sellers of quality instances are much inclined to stay away from the general market. It's a case where selling to someone who is specifically aware of the qualities of what you're selling is a far better customer.
This has other cognates. Software and consulting services come to mind.
The treatment in the economic literature is somewhat disappointing. There's Ackerloff's "The Market for Lemons", of course (won him a Nobel prize), but it's a generally underserved area of theory.