an indepth analysis on the subject of why politically repressed economies do better than politically free economies.
I saw this puzzle on economist and thought to ask it.
Why hasn’t the lemons problem killed adultery? To be more specific, why would any women want to steal a man who lies to, cheats on, and then dumps his wife? This is particularly clear in Woody Allen’s Match Point – the mistress angrily insists that her boyfriend leave his wife, even though he’s shown her in a hundred ways that he’s a lying, cheating parasite.
In the actual market for used cars, of course, the markets has largely solved the lemons problems using reputation, inspection, and warrantees. You don’t want to sell low-quality products if it will ruin your firm’s reputation, if they have to pass inspection first, or if a dissatisfied customer can return the product and get his money back. But it’s hard to see that mistresses can rely on any of these mechanisms. Few adulterers build up a reputation for standing by their mistresses. Most adulterers wouldn’t pass inspection. And I’ve never heard of an adulterer giving a credible money-back guarantee (“If I don’t leave my wife within a year, you get a full year of your life back!”). So what’s the point of stealing another woman’s man, if you can only steal the bad ones?