adverse selection
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English
Noun
adverse selection (uncountable)
- (economics, business, insurance) The process by which the price and quantity of goods or services in a given market is altered due to one party having information that the other party cannot have at reasonable cost.
- It is adverse selection that leads US workers who anticipate high family medical expenditure to seek employers with superior health insurance coverage for their employees.
- The large number of "lemons" in the used-car market is the result of adverse selection.