Arnold Kling's recent essay on George Mason's economics department has received much publicity on econ blogs. An excerpt:

Masonomics sees market failure as a motivation for entrepreneurship. As an example of market failure, let us use a classic case described by a Nobel Laureate, which is that the seller of a used car knows more about the condition of the car than the buyer. Masonomics predicts that entrepreneurs will try to address this problem. In fact, there are a number of entrepreneurial solutions. Buyers can obtain vehicle history reports. Sellers can offer warranties. Firms such as Carmax undertake professional inspections and stake their reputation on the quality of the cars that they sell.

For an example of Masonomics in action, consider this paragraph about a local used car dealer specializing in lending to people with poor credit histories:

Nice Cars Inc., like other used car companies, installs devices on their vehicles that disable the engine if payment stops. Before the shutoff is triggered, the device alerts the driver with a series of noises for a day or two beforehand.

If this innovation seems mean, I bet the company is willing to sell/lend to many more folks (and at better terms) than it might if such a device had not been invented.

In a similar vein, GPS is now used to monitor rental cars, truckers or fleet vehicles, and teenage drivers.