Barbie, Hot Wheels, and the Market for Lemons

The Barbie movie is more than a bit of good fun. It also teaches an economics lesson about lemons—the old slang term for defective goods, not the citrus fruit. The movie’s popularity has boosted the market for vintage Barbie dolls, not all of which are authentic. This uncertainty depresses their value, harming both buyers and sellers. Where the movie is about self-discovery and being authentic to yourself, the vintage Barbie market is about finding ways to trust others and verify their authenticity. Markets run on trust, and the vintage Barbie market is an excellent real-world example.

After seeing the movie, one of us was feeling gallant and wanted to score points with his spouse. He scouted around online and found an original Sunset Malibu Barbie from 1971.

The eBay seller indicated its NRFB status, which in collector’s lingo means “never removed from box.” And sure enough, the doll arrived intact in the unopened blister pack, albeit dinged up a little over the past 53 years. But the sealed Sunset Malibu Barbie was surely the right choice. Many of the loose Barbies on eBay were in sad shape. At least one smelled, as its seller allowed, like a box of crayons.

Read the full article on Real Clear Markets.