Self-selection

(redirected from Self Selection)
Also found in: Dictionary, Medical.

Self-selection

Consequence of a contract that induces only one group to participate.

Self-Selection

A situation in which only one person or group can take advantage of a contract.
References in periodicals archive ?
U] as the level of treatment chosen ex post by a known high risk if offered policy U (obtained by conditions equivalent to those in equations (6a) and (6b)), the self selection conditions for such a separating equilibrium are:
expected utility if uninformed (in which case, the individual cannot avail himself of opportunities for reducing hazard and the low risk policy is selected from the self selection menu).
Using the self selection constraints (9a) and (9b), this becomes:
3] which is defined by contract H and the binding self selection constraints (9a) and (9b).
The initially informed low risks are strictly better off when the uninformed become informed because of the weaker self selection constraint in the two contract menu (as is the case with the treatment option).
L]) because of the weaker self selection constraint with the two contract menu so [Delta]v is positive and the social value of information also is positive.
Thus, the only possible Nash equilibrium is a separating one in which hidden high risks are offered a policy H and uninformed are offered a policy U which satisfies the self selection constraint: