The net result is that in this market, adverse selection
is eliminated: the insureds are not more likely than those without insurance to use long-term care.
The present paper is concerned with the potential impact of adverse selection
as an outcome of employees' attitudes toward indirect cost control efforts.
There are no simple answers to the adverse selection
problem, other than insisting that everyone purchase the insurance.
Consequently, we expect a lower magnitude of the spreads, of the adverse selection
component of the spread, and of the PIN for those issues where additional information is revealed between the filing of the prospectus and the offer date.
In this context, we loosely define adverse selection
as the risk an insurer faces because only those who benefit from insurance at the offered price will buy it.
In theory, adverse selection
arises because those in good health and with low risk of health problems choose not to purchase health insurance because premiums based on average health risks do not adequately reflect their relatively better health.
In this paper, we extend the work of Genesove (1993) and Chezum and Wimmer (1997) and Wimmer and Chezum (2003) by characterizing adverse selection
as a sample selection problem in a setting in which sellers possess (1) an informational advantage over buyers and (2) characteristics that correlate with both seller incentives to select goods adversely and the quality of goods produced.
In this article, we investigate the empirical tractability of the adverse selection
risks associated with capital structure from 4,114 first-round Canadian venture capital investments.
is a situation where asymmetric information results in high-quality goods or high-quality consumers being squeezed out of transactions because they are unable to demonstrate their true quality.
From own damage cover to adverse selection
, the insurance world is full of jargon that's difficult for consumers to cut through.
Before 2014, health insurers have often required employers to meet minimum participation requirements to meet their underwriting requirements and avoid adverse selection
I will focus on three of the most important lessons: risk pooling is essential, adverse selection
is real and purchase mandates are required to manage both.