Lemons and liability: Is security on its way to defining the software market?

Back in 1970, American economist and Nobel Prize winner George Akerlof published an article in The Quarterly Journal of Economics titled “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism.” In it, Akerlof explains the policy changes that occur in response to a lemons market, in which the producer of a good holds greater knowledge about the product they are selling than the buyer. 

One product of this concept of “lemons markets” is warranties, which formalize expectations about the …

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