In the auto insurance market,who is most likely to have private information that leads to adverse selection?
A) the government agency that regulates insurance companies
B) the insurance company
C) the drivers
D) the insurance company and the drivers
E) the government regulating agency and the insurance company

Question

Quizplus · Accepted Answer

The drivers are the ones who have the most private information that could lead to adverse selection, such as their driving history, accident record, and other personal factors that could affect their likelihood of filing a claim. The insurance company may have access to some of this information, but not all of it, and the government regulating agency is not directly involved in the insurance market transactions.

In the Auto Insurance Market,who Is Most Likely to Have