Results of Lemons Experiment

*(An earlier version of this report said that Dealer 4 bought 4 cars, one at $2100 and one at $2400.  Dealer 4 actually bought
two at each price. Thanks to two students who pointed this out to me.     5/14/07)

In Session 2 there were 9 good cars and 9 lemons.
There were 6 car dealers.
Dealer number 1 bought 7 cars, paying $2000 each for three of them and $2200 each for four of them.
Dealer number 2 bought 4 cars, paying $2001 for one of them and $2201 for three of them.
Dealer number 3 bought 3 cars at $2300 each.
Dealer number 4 bought 4 cars, two  at $2100 and two  at $2400.*
Dealer number 5 bought no cars.
Dealer number 6 bought no cars.

All 9 good cars and all 9 lemons were sold.



In Session 3, Round 2
There were a total of 6 good cars and 12 lemons.
Dealer 1 bought 8 cars.   5 cars at $1500 and three at $1650.
Dealer 2 bought 7 cars, all at $1500.
Dealer 3 bought 1 car at $1500.
Dealers 4,5, and 6 bought no cars.

Of the cars that were sold, 5 were good cars and 11 were lemons.


In Session 4,
There were a total of 6 good cars and 12 lemons.

Dealer 1 bought 1 uninspected lemon for $500.
Dealer 2 bought 2 certified  good cars at $3499.99
Dealer 3 bought 3 certified good cars at $3499.99
Dealer 4 bought 2 certified good cars at $3499.99 and 2 lemons at $499.99.
Dealer 5 bought 7 lemons at $1700.
Dealer 6 bought nothing.


One of the dealers must have made a mistake since there were only 6 good cars while the records claim
that 7 good cars were sold.