In his seminal 1970 paper, Nobel laureate George Akerlof identified a whole class of economic problems as being driven by asymmetric information between two parties involved in an exchange. Applied to the market for second-hand cars, Akerlof noted that while quality varies, only the seller knows a car’s true quality. Confronted with superficially similar cars,
Reports abound that a central plank of Alistair Darling’s first Budget will involve increasing Vehicle Excise Duty on the most polluting cars by around £1,000. Squarely aimed at reducing unnecessary vehicle emissions, the gas-guzzler grab forms the latest part of a patchwork of green taxes designed to help the Government make progress on its target
Thinking about Parliament, it is easy to miss the wood for the trees. While it is often associated with party political exchanges and topical debates on issues of the day, its core function could be reduced to just one thing: the determination of how government is funded and how the money it raises should be
It is a story that could have been scripted to boost morale in Conservative headquarters. At five o’clock one morning, security guards at 10 Downing Street were called in to intercept an intruder only to find the Prime Minister trying to enter his own office. Apart from the delicious image this conjures of Gordon Brown
Those whom the gods wish to destroy they first tip for stardom. Throughout his twenties, Jim Murphy suffered this affliction. Before Tony Blair led the Labour party he was starting a Blairite revolution in the National Union of Students. His slogan, ‘realism, not revolution,’ made a cover story in the Sunday Times magazine. No list
Last week, in my digital dealings with the Driver and Vehicle Licensing Agency, I experienced something truly fascinating. Yes, I know. Subjective. Dangerous sentence. Bear with me. It was an epi- phany. The right time of year for it, I am told. In a few weeks’ time I have to hire a car. A few
Charles Moore’s reflections on the week President Sarkozy has made the right decision by avoiding the World Economic Forum in Davos this week. The global titans of banking and politics are not looking good: to be photographed having fun with them would be a provocation. Not since the oil crises of the 1970s has there
Martin Vander Weyer on the next thing to cause heartburn in the financial markets. The current market crisis sometimes feels like a Scrabble championship between financial pundits, in which most of us hesitate to challenge dubious words and strange jumbles of letters for fear of showing ignorance. First came ‘subprime’, which we learned to define
Oh Boy. If you thought the Société Générale saga was beyond belief – today we learn that Eurex, the derivatives exchange, had been trying to warn the French bank for two months about Jerome Kerviel’s extraordinarily large trading volumes – then I invite you to contemplate the £274 million loss clocked up on hedging transactions by
Network Rail’s performance is poor enough to test an archbishop’s patience, writes Martin Vander Weyer The archbishop and I — not having been formally introduced — confined ourselves to an exchange of despairing glances. We were at Doncaster, in the buffet car of the 19.13 from York to King’s Cross, listening to a series of
Matthew Lynn visits the Bentley factory in Crewe — where Spitfires were once built — and discovers how Volkswagen’s engineers and marketing men have revived the classic marque Turn right as you step into the plush foyer of Bentley’s Crewe headquarters and you find yourself in the company’s museum — a display of gorgeously preserved
Vegas, baby. Ask any self-respecting geek what’s the hottest thing in this town and it isn’t lap-dancers or crapshoots but gadgets and gizmos. Las Vegas is the venue for the gadget squad’s annual get-together, the Consumer Electronics Show. This year’s was the biggest ever: 150,000 specialists from all over the world in town for a
Do the sources disagree? Of course. And so they should. One of the mysterious aspects of human perception is the way in which eye-witnesses disagree about what they have seen. Not just many years later, when memory has had ample time to weave its fantasies, but soon, even immediately, after the event. An interesting case
