legal, as long as it is disclosed.

After Doree Lynn’s lawsuit, the NBC news show “Dateline” bought emeralds at four prominent jewelry stores in

New York City in 1997. All the sales clerks at these stores, unaware that they were being recorded on a hidden

camera, said the stones were untreated. When the emeralds were tested at a laboratory, however, technicians

discovered they had all been treated with oil or epoxy. Emeralds are not the only gemstones that are treated.

Diamonds, topaz, and tourmaline are also often irradiated to enhance colors. The general rule is that all

treatments to gemstones should be revealed, but often sellers do not disclose this. As such, many buyers face a

situation of asymmetric information, where two parties involved in an economic transaction have an unequal

amount of information (one party knows much more than the other).

Many economic transactions occur in a situation of imperfect information, where either the buyer, the seller,
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