Asked by Sarah Carter on Sep 24, 2024
Adverse selection is
A) when people act differently because they are insured
B) when more risk averse people want to be insured more
C) when people at a greater risk want to be insured more
D) when your guess at a test question is wrong
Adverse Selection
A situation in which one party in a transaction has more or better information than the other, often leading to a poor outcome for the less informed party.
Insurance
A financial product sold by insurance companies to safeguard against financial loss in the event of specific contingencies or risks.
- Gain insight into the idea of adverse selection in insurance markets.
Learning Objectives
- Gain insight into the idea of adverse selection in insurance markets.