Meet Janet Yellen's husband, George Akerlof

‘Phishing for Phools’: A Q&A With George Akerlof and Robert Shiller

SOLVED: Review the basic assumptions of the Akerlof model. Assume that, in this market, the quality of cars Xi is distributed as follows: Xi is distributed as a Uniform[q1, q2]. Note that in class we analyzed the version of the Akerlof model where q1 = 0 and q2 = 100. (a) Let q1 = 0 and q2 = 50. Will any cars sell in this market? Explain your reasoning carefully. (b) Let q1 = 0 and q2 = 200. Will any cars sell in this market? Explain your reasoning carefully. Does raising the maximum quality of