Comment by panick21_

The papers results are only barley accounted for in reality, as it misses many real world tactics and heuristics people actually use to get around the problem. Let alone many other market mechanism that exist around that market.

The real effects are way smaller then claimed in the paper and market collapses don't or almost never happen for that reason.

And in real live many people drive reliable used cars. And may people buy used cars over and over again. Because its not about verification, only about picking one of the better options, and many heuristics can be applied to do that.

If market forces push everything towards lower quality. Why are cars (and everything else) today so much more energy efficient and more comfortable. Why are phones so much better? Why is pretty much every product today so much better then it was 50 years ago?

Somehow everything gets worse, yet my operating system on my computer crashes far less often. Despite many more features. My hardware fails less often to, harddisk, then and now, its a joke.

The food is better, both in quality and diversity when I go to restaurants.

I really don't understand how people can argue against this claiming quality is going down over time. Outside of very specific things very temporarily, like twitter, this isn't the case.

There are many reason for this, and only focusing on finding a list of as many 'market failures' as economist can come up with, misses so much about how in the real world people (including governments) deal with many of these things.