Adverse selection online dating
Adverse selection refers generally to a situation in which sellers have information that buyers do not have, or vice versa, about some aspect of product quality—in other words, it is a case where asymmetric information is exploited.
In the case of insurance, avoiding adverse selection requires identifying groups of people more at risk than the general population and charging them more money.
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The arcane language of economics — search, signaling, adverse selection, cheap talk, statistical discrimination, thick markets, and network externalities — provides a useful guide to finding a mate.
Another example of adverse selection in the case of auto insurance would be a situation where the applicant obtains insurance coverage based on providing a residence address in an area with a very low crime rate when the applicant actually lives in an area with a very high crime rate.
Obviously, the risk of the applicant's vehicle being stolen, vandalized, or otherwise damaged when regularly parked in a high-crime area is substantially greater than if the vehicle was regularly parked in a low-crime area.