The idea that when a seller has private information about the value of goods,buyers will discount the price they are willing to pay due to adverse selection is known as the:

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The idea that when a seller has private information about the value of goods, buyers will discount the price they are willing to pay due to adverse selection is known as the lemons principle. This principle is named after the famous example in which buyers are wary of purchasing used cars because they are uncertain about the quality (due to the lack of information about the car's history) and therefore assume the car is a "lemon" (a low-quality car). As a result, buyers are only willing to pay a lower price for the car, which in turn may lead sellers of high-quality cars to withdraw from the market, leaving only low-quality cars available for sale.

The Idea That When a Seller Has Private Information About