The phenomenon is known as a 'market for lemons' - freakonomics did a story about it and how it applies to the used car market, but the same principles apply: free markets go bad if one side is low-information.
Simply labeling this as "market for lemons", a case in which different parties of a transaction have differential knowledge, a/k/a, an information asymmetry, misses a larger and more general dynamic at play.
I've commented on longer length here: "Is Gresham's Law a special instance of a more general phenomenon?"
The thing that Moen's Law, Gresham's Law, the Market for Lemons, and other elements hings on is the inherent frictions and costs of information. Not only in acquiring information, but in assimilating it.
Actually, the Dunning-Kruger effect also counts. There are people who are so bad at recognising the truth (or quality) that they don't even know they're bad at it.
There are a tremendous number of other factors baked in as well. Why signalling works and/or is used (it is more effective at communicating than the quality being signalled), why false signalling is used (because a cheap signal substitutes for expensive quality).
A more pernicious case falls under the law of unintended consequences. Here the issue is implications of use or manufacture of a good or service which aren't available to anyone when initially transacted or provided. The use of fossil fuels (global warming, acid rain, particulates) comes to mind. Thomas Midgley, the most dangerous inventor in history, is another example. Two of his creations, freon (chlorofluorocarbons) and leaded gasoline both threatened or harmed more people than any other single person in history.
I've been exploring the question of extractive materials pricing, and in particular oil and gas, in light of information that's come to light since their first large-scale appropriation. How doctrines such as the Rule of Capture came to be accepted and commonplace (less so now, but still the foundation of much mineral law, and still extant in Texas), or understanding just how long it takes for fossil fuel reserves to be restored, and how true economic cost might be reconsidered, come to mind. The information is present, but it's not being assimilated.
