CONCEPT
The Market for Lemons
George Akerlof's 1970 analysis of how information asymmetry destroys markets — and the structural template for understanding what happens to the market for professional expertise when AI's polished output makes the quality of human judgment invisible.
In Akerlof's founding example, buyers in a used car market cannot distinguish good cars from defective ones (lemons). They discount the price they offer for any used car. The discount drives sellers of high-quality cars out of the market. Only lemons remain. The market collapses — not from fraud but from information asymmetry. The structural logic applies with disquieting precision to the market for AI-augmented professional work: when AI polish makes judgment-rich and judgment-poor output indistinguishable on the surface, the market cannot reward the judgment differential, and the classical adverse selection spiral begins.
In The You On AI Field Guide
The mechanism requires three conditions: a quality differential between goods, information asymmetry between producers (who know the quality) and consumers (who do not), and the consumer's inability to verify quality before purchase. All three are present in AI-augmented professional services. A legal brief drafted with extensive AI assistance and careful human review looks