Match Point, yet another Woody Allen movie about adultery, reminds me of a question I've often wondered about: Why hasn't the lemons problem killed adultery? To be more specific, why would any women want to steal a man who lies to, cheats on, and then dumps his wife? This is particularly clear in Match Point - the mistress angrily insists that her boyfriend leave his wife, even though he's shown her in a hundred ways that he's a lying, cheating parasite.
In the actual market for used cars, of course, the markets has largely solved the lemons problems using reputation, inspection, and warrantees. You don't want to sell low-quality products if it will ruin your firm's reputation, if they have to pass inspection first, or if a dissatisfied customer can return the product and get his money back. But it's hard to see that mistresses can rely on any of these mechanisms. Few adulterers build up a reputation for standing by their mistresses. Most adulterers wouldn't pass inspection. And I've never heard of an adulterer giving a credible money-back guarantee ("If I don't leave my wife within a year, you get a full year of your life back!").
One solution to this puzzle is to challenge the deny that mistresses want to marry the men they're cheating with. Maybe both are in it for the short-term. But this hardly seems like a plausible explanation for the typical long-term affair.
Another solution is that the typical adulterer is so desirable in all other dimensions that he's a good catch despite his lack of character. Maybe a segment of women prefer a small chance of marrying a rich, successful liar to a high chance of marrying an honest nobody. There's probably something to this, although it still seems like a lot of adulterers are nothing special by any measure.
Still another story is that mistresses are capitalizing on the life cycle. If a 25-year-old mistress convinces a 45-year-old success object to leave his wife, he won't want to cheat on her for fifteen years, at which point he'll be too old to attract another 25-year-old, so he'll stay.
In the end, though, I think that most of the puzzle has to be resolved with psychology rather than economics. The average mistress is probably overconfident; she imagines that she is a lot more desirable than the average mistress. So if a mistress convinces a man to leave his wife, she tends to think that he left because she is so great, not because he can't be trusted.
Happy Valentine's Day, Econlog!
P.S. I will not be held liable for any Valentine's dates ruined as a result of this post.