One paper in particular inspired the core problem I wanted to dedicate myself to solving.

Back in the 1970's George Akerlof wrote one of the most cited papers in modern economic theory, “The Market for Lemons”, in which he discussed the market implications of information asymmetry. The classic example of information asymmetry and its effect on buying decisions are salesmen of second hand cars — the salesmen are aware of defects, and this puts them at an advantage over buyers who have no reasonable means of knowing.

Akerlof shows that a market with information asymmetry is bad for both the consumers who end up with poor products, and also for quality sellers who are unable to differentiate their value and are forced to sell at the same price as the inferior options.

The Internet was initially heralded as the solution to information asymmetry. Even the hugely popular book Freakonomics touched on this subject:

Information is the currency of the Internet. As a medium, the Internet is brilliantly efficient at shifting information from the hand of those who have it into the hands of those who do not. Often […] the information existed but in a woefully scattered way. (In such instances, the Internet acts like a gigantic horseshoe magnet waved over an endless sea of haystacks, plucking the needle out of each one.) […] The Internet has accomplished what no consumer advocate could: it has vastly shrunk the gap between the experts and the public.

Unfortunately, the sheer volume of information disseminated on the internet overwhelms our ability to process it. Waving your ‘information magnet’ over the internet when researching a choice leaves you combing through endless amounts of medicore data. We went from information asymmetry due to lack of information, to information overload.

Looking at the Apple App Store for example, the number of apps available far exceeds the unique use-cases we use them for. A Nielsen study showed that while the quantity of available apps has exploded, the number of individual apps used by people per month remained relatively flat.

This results in us having to choose from the thousands of available apps for a given task. But how do you pick a calendar app when there are so many of them available, the majority for free and most with roughly the same star rating?

Star ratings are particularly problematic due to the context of each person rating the product being varied and unknown. Devavrat Shah, a professor at MIT’s Laboratory of Information and Decisions Systems, recently conducted research on the failings of star rating systems:

If my mood is bad today, I might give four stars, but tomorrow I’d give five stars…Your three stars might be my five stars, or vice versa. For that reason, I strongly believe that comparison is the right way to capture this. — Devavrat Shah

The App Store isn't the only flawed system we have in place. Amazon requires you read multiple reviews for every potential product and maintain the tradespace of the various pros/cons in your head. Then there are the editorialized approaches, which are typically out of date and, depending on the author’s interests and bias, might not reflect what’s right for you. Forums are a signal-to-noise ratio nightmare. Searching on Google just surfaces the editorialised pieces, forums or whatever product has the best SEO. None of these systems come close to solving the signal-to-noise ratio problem and we're left digging through a stack of browser tabs.

Another common fault of these systems is that they are focused on products in isolation, not contextualized to the problem the consumer is trying to solve. A programmer looking to buy a new laptop wants to see the information through that lens (“does it run Linux?”), not reviews on individual laptops that don't consider the overall tradespace and the consumer’s use-case.

An unfortunate side-effect of these problems are the most popular products rarely being the best of that class, but instead those with the best marketing. Every advertisement is a nugget of information asymmetry. When’s the last time you saw an ad explaining that for some people the competitor’s product is actually superior? Marketers and salesmen have typically been the mortal enemy of anyone who wants to make an informed choice. Even the nicest and most moral Samsung marketer won’t go out of their way to point out that Nexus devices get OS updates earlier.

So despite all these efforts and the amazing utility of the internet, there is still a market for lemons when there really shouldn't be.