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A second related, though distinct, component--flowing from the first--is that the steady departure of a public school's comparatively more motivated students may fundamentally alter a school's internal dynamics in two potentially important (and damaging) ways consistent with what adverse selection would predict.
The lighter shaded region in figure 1 gives the welfare gain that results from the mitigation of adverse selection with the ACA.
Despite a fair amount of research on mortality risk, the impact of all three mortality risk components (separately and combined) and basis risk resulting from adverse selection on the risk level of a life insurance company and on the effectiveness of different risk management strategies with respect to reaching a desired risk level as well as hedging against unexpected changes in mortality has not been systematically studied.
1996) and the adverse selection component of the spread ([theta]) as in George, Kaul, and Nimalendran (1991).
Individual and employer mandates solve the adverse selection problem in the aggregate by forcing everyone into the risk pool.
And a large segment of the uninsured comprises healthy individuals who may voluntarily choose to forego health insurance at existing premiums as predicted by adverse selection theory.
For example, Kim (1985) developed an adverse selection model in which car owners' maintenance and upkeep decisions affected the quality of used cars.
Unfortunately, to date there is no consensus about the presence of informational asymmetries that come from either adverse selection or preventive effort.
As we will see, courts, policymakers, and legal academics routinely--and often uncritically--discuss adverse selection as a major issue in the design and regulation of insurance markets.
On the basis of the answers to a question administered to 1,790 students at Italian universities, we are interested in analyzing the perception of quality of university courses available on line, in order to distinguish signals, a la Spence, which can reduce the problem of adverse selection.
The association between demand and cost is called adverse selection (Cutler and Zeckhauser, 1998), and it has consequences for the efficiency of health insurance markets when plans can charge only one premium.
Small firms find it more difficult to purchase insurance than large ones, partly due to what Phillips calls "the concept of adverse selection.