Professional Documents
Culture Documents
Application:: Social Security
Application:: Social Security
Asymmetric Information
and Adverse Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Asymmetric Information 326
Example with Full Information 327
Example with Asymmetric Information 327
The Problem of Adverse Selection 329
Does Asymmetric Information Necessarily Lead to Market Failure? 330
Application: Adverse Selection and Health Insurance Death Spirals 331
How Does the Government Address Adverse Selection? 332
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
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