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April 2007
May 2007

2007-04-25 »

Lemon products disrupt the market

Bruce Schneier has an interesting article called A Security Market for Lemons, in which he discusses how in security products, bad products are actually more likely to sell than good ones.

The super-quick version of the story is that, if buyers can't easily tell which product is best, they'll assume that all products are worth the "average value." Bad products ("lemons") reduce the overall average value, so that the best products necessarily cost more than the average and nobody's willing to buy them. So people stop making those, lowering the average further, so people stop making the next-best ones, and so on.

It's a very interesting unstable system.

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