Adverse selection

Adverse selection
If insurance is available at the same price to people facing widely varying risks, then those with the greatest risks are more likely to buy insurance. This adverse selection works to the detriment of insurers.

Adverse Selection in Health Insurance
Suppose an insurance firm offered health insurance to the general public. It is likely to have the highest take up rate amongst unhealthy people. People who don't exercise, people who smoke.

Adverse Selection
Adverse Selection definition :
Refers to a situation in which sellers have relevant information that buyers lack (or vice versa) about some aspect of product quality.
TSCTrade.com ...

Adverse Selection
Occurs when an employee or group of employees purchase or select coverage with a greater than likely loss at the expense of an insurance company (or the organization if it is self-insured). This is also called ANTI-SELECTION.

ADVERSE SELECTION (Encyclopedia)
The role of a bank intermediaries is to "intermediate" between players who are in financial deficit and those experiencing a surplus in order to resolve their need to invest available financial resources.

adverse selection
tendency of people with significant potential to file claims wanting to obtain insurance coverage.

ADVERSE SELECTION - Refers to a situation in which sellers have relevant information that buyers lack (...
ADVERSE USE - Use of someone's property without permission.
ADVICE - a bank's written acknowledgement of a transaction ...

Adverse selection
When you do business with people you would be better off avoiding. This is one of two main sorts of market failure often associated with insurance. The other is moral hazard.

Adverse selection A problem created by asymmetric information prior to a transaction.

Adverse selection - Self-selection, within a single risk category, of persons of above-average risk.
Advertising elasticity of demand - The responsiveness demand to a change in advertising expenditure.

Adverse selection [r]: a partial market failure that occurs when there are traders who take advantage of asymmetric information, raising uncertainty and leading to a reduction in the value of its products. [e] ...

ADVERSE SELECTION: When a negotiation between two people with different amounts of information, that is, asymmetric information, restricts the quality of the good traded.

Adverse selection
A situation in which market participation is a negative signal.
Stock selection
An active portfolio management technique that focuses on advantageous selection of particular stocks rather than on broad asset-allocation choices.

adverse selection in insurance markets, a situation in which the people who choose to buy insurance will be the riskiest group in the population; analogous situations apply in other markets. (13) ...

Adverse Selection
The tendency of those most at risk in a group to take out insurance so that the insuring FI that priced the contract with respect to the average in the group is faced with losses.
Agency Fee ...

ADVERSE SELECTION
The tendency of individuals with poorer-than-average health to apply for or continue insurance coverage to a greater extent than individuals with average health.
AFTER-BORN CHILD ...

Adverse selection is the tendency of individuals with private information that affects a potential trading partner’s benefits, to make offers detrimental to the trading partner.

Adverse selection
The tendency for insurance to be purchased only by those who are most likely to need it, thus raising its cost and reducing its benefits.
Adverse terms of trade ...

What leads to this adverse selection is asymmetric information: potential purchasers have more information than the sellers.

Pecking-order view (of capital structure) The argument that external financing transactions costs, especially those associated with the problem of adverse selection, create a dynamic environment in which firms have a preference, ...

Adverse selection A situation in which market participation is a negative signal. Affirmative covenant A bond covenant that specifies certain actions the firm must take. After-tax profit margin The ratio of net income to net sales.

[OTS] adverse selection A situation in which a pricing policy causes only the least desirable customers to do business, e.g., a rise in insurance prices that leads only the least-good risks to buy insurance.

Some states require that insurance companies cover all who apply at the same cost; this rule has the effect (called adverse selection) that healthy people subsidize sick ones, ...

This new system avoids the two pitfalls of adverse selection and moral hazard associated with traditional forms of health insurance by using a combination of regulation and an insurance equalization pool.

Underpricing also helps to overcome adverse selection problems. Since uninformed investors tend to get a higher allocation of overpriced shares, they will stop participating in IPOs if issues are not, on average, underpriced.

Adverse selection
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adverse weather aerial delivery system ...

those associated with the problem of adverse selection, create a dynamic environment in which firms have a
preference, or pecking-order of preferred sources of financing, when all else is equal. Internally generated ...

The argument that external financing transaction costs, especially those associated with the problem of adverse selection, create a dynamic environment in which firms have a preference, or pecking-order of preferred sources of financing, ...

An independent auditor's opinion expressing that a firm's financial statements do not reflect the company's position accurately. See also: Qualified opinion.
Adverse selection ...

See also: Expense, Transaction costs, Stockholder Equity, Cost of capital, Average cost of capital