About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

70 U. Miami L. Rev. 830 (2015-2016)
How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the Lemons Problem

handle is hein.journals/umialr70 and id is 858 raw text is: 








How the Internet, the Sharing Economy,
and Reputational Feedback Mechanisms
          Solve   the  Lemons Problem


ADAM   THIERER,* CHRISTOPHER KOOPMAN,** ANNE  HOBSON,*** AND
                       CHRIS KuIPER****


       This paper argues that the sharing economy-through
   the use of the Internet and real time reputational feedback
   mechanisms-is  providing a solution to the lemons problem
   that many regulators have spent decades attempting to over-
   come. Section I provides an overview ofthe sharing economy
   and  traces its rapid growth. Section II revisits the lemons
   theory as well as the various regulatory solutions proposed
   to deal with the problem of asymmetric information. Section
   III discusses the relationship between reputation and trust
   and analyzes how reputational incentives affect commercial
   interactions. Section IV discusses how information asymme-
   tries were addressed in the pre-Internet era. It also discusses
   how  the evolution of both the Internet and information sys-
   tems  (especially the reputational feedback mechanisms of
   the sharing economy) addresses the lemons problem. Sec-
   tion V explains how these new realities affect public policy
   and  concludes that asymmetric information is not a legiti-
   mate rationale for policy intervention in light of technologi-
   cal changes. We also argue that continued use of this ra-
   tionale to regulate in the name of consumer  protection


   * Senior Research Fellow, Mercatus Center at George Mason University
   ** Research Fellow, Mercatus Center at George Mason University, Adjunct
Professor, George Mason University School of Law. LL.M., George Mason Uni-
versity School of Law, 2014; J.D., Ave Maria School of Law, 2012.
     MA  Fellow, Mercatus Center at George Mason University.
     MA  Fellow, Mercatus Center at George Mason University.


830

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 3,000 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most