What would come to your head when you hear the word lemon? Freshness, refreshment or just the juicy lemon? Lemons I want to talk about here actually mean cars at the second-hand market. The market for lemons is a theory brought out from a scientist named George Akerlof. He even won the Nobel prize in 2001 because of it.

Before we have a closer look at the theory, I would like to ask you a simple question. Just imagine, there are two different kinds of cars (good quality, in the theory called peaches and bad quality, in the theory called lemons) at the second-hand car market. Which kind of cars are more quickly to be sold? Lemons or Peaches? You are thinking of peaches, right? The answer is that lemons are sold much more quickly than Peaches. It appears at first unbelievable, but if you think further, it is reasonable. 

Well, according to the theory, there are several reasons behind it. Let us start with asymmetric information. Obviously, buyers and sellers cannot get the same information about the products at the same time, which leads to another problem, namely, the expectations of buyers and the price they would like to pay for a car. For example, a lemon worthies 1000 Euro while a peach 2000 Euro. Then, a buyer is very likely to only want to pay 1500 Euro for a car, because he bears in mind that he could get a peach but also a lemon. In this case, a seller of lemons is willing to negotiate, makes promises or even provides with extra service. A seller of peaches on the other hand is unlikely to do so. After a gradual process in which lemons are sold and peaches not at all, there would only be lemons left at the market in the end. That is also why this theory is called the market for lemons.

Actually, this theory exits everywhere in our life. Quite often, we come out from a supermarket with several products with fancy packages while we only want to get a bag of salt for cooking. As an artist agent, we have come across many excellent dance groups, who believe that good performances speak for themselves and therefore sell themselves. You see, lemons try their best to present themselves, but peaches spend their time on more important things. That is also why we need something more to back up our decisions when we make choices. In the second-hand car market, there is TÜV. Different independent Institutes are active in the grocery area. In the dance world, you can put your trust in NDKD. With a history of three generations and the passion for dance, strict select of dance groups from all over the world, NDKD devotes itself to introducing outstanding dance groups to Germany. Come to us and we assure you that you are guaranteed to get, instead of lemons, only peaches from us :)