A 1970 paper by George Akerlof about how Information asymmetry between sellers and buyers can cause markets to worsen or even collapse
Here's how the "market for lemons" works
There are good used cars (“peaches”) and bad ones (“lemons”).
Sellers know which is which. Buyers can’t tell; they only know the overall distribution of quality in the market.
If buyers can’t distinguish quality, they’re only willing to pay a price that reflects average quality.
At that average price, owners of high-quality cars decide it’s not worth selling (because they know their car is better than “average”).
They withdraw from the market. This lowers the average quality of cars left in the market.
Buyers, rationally, lower the price they’re willing to pay even further.
This can spiral until only the worst products (“lemons”) remain or, in the extreme, the market collapses entirely.
These problems can be mitigated by Information symmetry where sellers and buyers both know as much as possible about the thing
This has developed into an entire field called Information economics
This has further developed in the following way
Michael Spense looked at the "information-haver" side into "signaling" i.e. how informed agents can credibly communicate their type
For example, education is a signal of productivity. it's hard to directly measure productivity, so employers use education as a proxy, since it's easier/cheaper for high-productivity workers to get a degree (smarter, more organized, they qualify for scholarships, etc.)
Joseph Stiglitz looked at the "less-informed side" - employers and insurance companies can design a "menu of contracts" to get people to reveal themselves: i.e. high deductible + low premium vs low deductible + high premium
All of this applies to the following fields
Contract theory and mechanism design
Auctions: private valuations, winner's curse, bidding strategies
Corporate finance: debt vs equity, pecking order theory, etc
Banking and crises: Bank runs and panics tend to have a strong info-asymmetry component
Digital marketplaces and algorithmic pricing: Platforms have insane info advantages over users, research into new adverse-selection or exploitation problems
WeWrite could be used to Connect all the dots and bring about information symmetry in the whole economy, driving all prices down to zero / the cost of energy, since Your margin is my opportunity and everyone's engaged in the Race to the bottom thanks to the market mechanisms