Economist Tim Harford on why your colleagues are stupid and why you can't buy a decent used car.

First the cars...

His [Nobel laureate Akerlof's] basic insight was simple: If somebody who has plenty of experience driving a particular car is keen to sell it to you, why should you be so keen to buy it?

A person with a good car would hold onto it because he couldn't prove it was good and so wouldn't expect an attractive offer for it. And if the good cars aren't put up for sale, the lemons will be what is left. This is a problem not just for buyers, but for sellers, too, who wish they could be trusted.

Your co-workers...

Then there's the market for jobs. How many of your colleagues are lemons? If you're competent but can't prove it to your boss, you may prefer to be a freelancer. If other competent workers think that way, it may explain why you think your colleagues are idiots and they think the same about you.

These problems can be solved, but at a cost.

And an explanation of the signalling value of higher education (Yes, MBAs included).

Employees spend years acquiring qualifications with little value other than proving that they're smart and work hard.

And used-car buyers will look for trusted sellers, even if that raises the cost of doing business. I bought my Volvo from my brother-in-law because I thought that would lower the risk of being sold a lemon.

And that ladies and gentleman is an answer to the "Why MBA, Why now" question that you should NEVER share with the Admission Committee.