Once again, for the sake of argument, let us simply assume the plausibility of the threat posed by adverse selection
critique exacerbated by publicly funded school voucher programs.
In this extended model, changes in markups and changes in adverse selection
Furthermore, in contrast to the previous literature, we specifically study the impact of information asymmetries concerning mortality heterogeneity and the resulting adverse selection
on an insurer's risk situation and the effectiveness of risk management.
The Adverse Selection
Component of the Bid-Ask Spread ([theta]), estimated using the model of George et al.
However, these arrangements by themselves do little or nothing to reduce the adverse selection
problem and thus--like mandates--require additional risk adjustment mechanisms in order to function well.
Bush's proposal to exempt from income taxes up to $15,000 in health care expenses for everyone--even those not covered under employer plans--lacks compulsion, doesn't help low-income groups, does not address problems of adverse selection
, and is too generous toward high-income groups.
Because equilibrium effort equals zero, quality effects do not alter seller selection decisions and, therefore, the adverse selection
This study examines if asymmetric information does affect health plan markets by allowing for the presence of both adverse selection
and moral hazard.
Part I describes the importance ascribed to adverse selection
in insurance markets by courts, regulators, and legal commentators.
Using the second hand car market as his example, Akerlof shows that when the buyers and sellers have different information about the quality of the goods (information asymmetry) this results in a problem of adverse selection
on the market.
This analysis shows that too few people will purchase drug coverage when there is adverse selection
and the plan can charge only one premium.
The hotel real estate market during 2001 and 2002 resembles an adverse selection
market, but not due to information about properties being hard to find.