This lecture continues our discussion and analysis of strategic interaction with asymmetric information and uncertainty. We examine the problem of adverse selection and the "lemons" problem (why is the used car you buy likely to be a "lemon"?) . Here, bad quality products drive out good quality products. Next we look at attempts to solve the lemons type problem: can uninformed buyers find tests or screens to help resolve their uncertainty? Can privately informed sellers provide signals like warranties or certification reports that buyers will believe?