adverse selection
The process by which the price and quantity of goods or services in a given market is…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.
Meaning
1 senses(uncountable)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.
More definitions
- A situation where sellers have information that buyers don't (or vice versa) about some aspect of product quality.
Synonyms
1 synonymsClose in meaning
- A situation where sellers have information that buyers don't (or vice versa) about some aspect of product quality.:anti-selection
Word family
3 related wordsLessons for this word
1 lessons- A1Countable and uncountable nouns — Because it can be uncountable