Market Failure
Market failure occurs when markets allocate resources inefficiently because of externalities, public goods, market power, or information problems.
Market-failure, signaling, pooling, separating, and lemons-market terms used in finance.
Information Asymmetry and Market Failure covers supply, demand, competition, market power, pricing behavior, auctions, information problems, regulation, and market-failure concepts used in finance.
Use these pages when a term changes pricing power, revenue assumptions, cost pass-through, market structure, auction outcomes, consumer behavior, or regulatory exposure. It sits inside Market Competition and Pricing, so readers can move up when the broader economics context matters.
This landing page points readers toward Market Failure, Market for Lemons, Pooling Equilibrium, and Separating Equilibrium. Choose the narrower page when the term changes the evidence source, calculation, institution, market convention, risk exposure, or decision being made.
| Area | Use it for |
|---|---|
| Market Failure | Market failure occurs when markets allocate resources inefficiently because of externalities, public goods, market power, or information problems. |
| Market for Lemons | Market failure model where asymmetric information about quality can drive good products out of the market. |
| Pooling Equilibrium | A pooling equilibrium occurs when different types of participants choose the same signal or action, limiting market information. |
| Separating Equilibrium | Separating Equilibrium covers competition, pricing, demand, auction, market-power, or information-friction concepts used in finance. |
Market-competition content is educational and does not provide antitrust, legal, pricing, or investment advice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Market failure occurs when markets allocate resources inefficiently because of externalities, public goods, market power, or information problems.
Market failure model where asymmetric information about quality can drive good products out of the market.
A pooling equilibrium occurs when different types of participants choose the same signal or action, limiting market information.
Separating equilibrium occurs when different types of agents (such as high-risk vs.