Friday, June 3, at the CADI at 6 p.m. at a workshop about the competition based on the story of Sadhu Cucerai.

Intro
The aim of the competition is maximizing market share, not good for consumers, and this can be seen best when product is almost as good as the rival product, but noticeably cheaper. In this case, the consumer has strong incentives to rationally prefer the new product at the expense of the one already existing, even if the latter is superior in terms of quality. We have therefore a situation like this than that described by Gresham's law, in which the product is taken off the market for good product.

On the other hand, between producer and customer, there is an information asymmetry: the producer knows exactly what occurred and how exactly did it, while the client does. If the client does not refer to the difference between the actual product and the quality of the declared or if, although a sensitive, she finds an irrelevance, or if, although she finds relevant, it is more costly for him to damage than to accept it, will have intreprinzatorul rational strong incentives to be devoid of honesty, for that will get an additional source of profit. Thus we find another case of adverse selection, in which competitors are perfectly honest removed from market by those who practice the lack of residential.

Where does all this lead us? Those hostile to freedom square, the same conclusions they had and before you read this article. We, the others, it is necessary to lead us toward finding those mechanisms to limit or even cancel the adverse selection phenomena that they generate free competition, so that consumers are able to enjoy the maximum benefits possible from cantitarea.

Program
18:00 Shows Sadat Cucerai
18:20 Discussion

Text
Sorin Cucerai, 2009 "Competition as adverse selection," based on three articles published in the Newspaper.