Information, Risk & Exclusion
Economist have actually asked questions such as, "Why are
there business organizations and not just individuals buying
and selling in markets?" Ronald Coase helped provide a good
answer, as explained by Michael Munger:
econlib.org/library/Columns/y2008/Mungerfirms.html
What happens when one side of the market has better
information about product quality than the other? Three
economists who answered that question received a Nobel Prize
in 2001:
nobelprize.org/nobel_prizes/economics/laureates/2001/public.html
Mazda destroys 4703 new cars, worth about $100 million, to protect its brand name:
http://online.wsj.com/public/article/SB120942873506551291.html?mod=blog
Here is an explanation of arbitrage, one of the several
topics discussed in this section:
www.riskglossary.com/link/arbitrage.htm
Insurance markets are strange markets, and give rise to a
phenomenon called moral hazard. This entry in The Concise
Encyclopedia of Economics explains a bit about this
market and the problems in it:
www.econlib.org/library/Enc/Insurance.html
(I have not yet found an appropriate entry for this
topic.)
Some kinds of auctions should be avoided. This blog entry
has a lengthy quotation from economist Robert Frank on the
entrapment game:
the-raw-prawn.blogspot.com/2004/10/study-winning-sports-teams-do-not-help.html
These links were checked on July 5, 2008.
  
Copyright
Robert Schenk
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