Adverse selection is a problem that arises in markets where the seller knows more about the attributes of the good being sold than the buyer does.

Question

Quizplus · Accepted Answer

Adverse selection occurs when the seller has superior information about the product being sold, which creates an imbalance of information between the buyer and seller. This can lead to the buyer making a suboptimal decision or not wanting to buy the product at all.

Adverse Selection Is a Problem That Arises in Markets Where