The wine delusion

A bizarre market
The wine market works in a peculiar way. Sellers know more about the product than
buyers do, causing an imbalance in power (Reiss, 2013, p. 233). Economists call this
principle, ‘information asymmetry’. Because people can’t access the quality before buying
it, their decisions involve risk. Which would mean that low­quality products could dominate
the market (Akerlof, 1970). This theory was predicted by the Nobel Prize­winning
economist George Akerlof. Akerlof called it ‘lemons theory’, applying it to the used car
market. The word lemon refers to defective cars sold on the used car market. The word
cherry refers to good cars sold on the used car market. People can never really tell whether
a car is a cherry or a lemon before buying it (Veseth, 2007). So their best guess is that it is
of average quality. The price they pay reflects the average quality. Realising that they can
never get a justified price, cherry owners refrain from selling. Which would leave the market
with lemons (Akerlof, 1970). The wine market is quite like the used cars market, only more
bizarre. People can never tell whether a wine is a lemon or not until they open the bottle.
Even if they do, they certainly can't get their heads around it. Because wine is complex; so
much so that people lack the confidence to complain (Sutherland, 2013). So, how do
people go about buying a bottle of wine? Their best guess is to rely on two things: price
and expert opinion. People assume that the more expensive wine will taste better than the
cheaper wine. People assume that the wine recommended by critics will taste better than
the rest (Dubner, 2010). But according to the British psychologist Richard Wiseman (cited
in Sample, 2011) who has been testing those assumptions over and over again, among
experts and amateurs alike, the answer is clear: the chances of anyone identifying a wine
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