This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof's setting, sellers are better informed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: The market...

This article studies the optimal scope of negligence, considering which of the parties’ precautionary measures should be included in the determination of negligence and which instead should be omitted. The analysis shows that the optimal scope of negligence balances the gains derived from...