The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • John G. Riley
Reference work entry


If product quality of individual units cannot be observed at the time of purchase, but buyers do eventually learn average quality, goods will be traded at a price which reflects buyers’ beliefs about this average. The price will then adjust until buyers’ beliefs about average quality are confirmed ex post.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • John G. Riley
    • 1
  1. 1.