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How can the adverse selection problem explain why you are more likely to make a loan to a family member than a stranger?
Wiki User
∙ 14y ago
In my understanding,I think we can reduce risk when we make loan to a family members as well as lowering a transaction cost to him/her.
Wiki User
∙ 14y ago
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As it applies to insurance the adverse selection problem is the tendency for?
As it applies to insurance, the adverse selection problem is the trndency for:
Why the advers selection problem plays no role if both parties are risk neutral?
The simple answer is that both adverse selection and moral hazzard impose risk to the party. When this party is risk neutral, he or she would not be adversly affected by the risks associated with the transactions including risk of adverse selection.
What is anti-selection?
The adverse impact on an insurer when risks selected have a higher chance of loss than that contemplated by the applicable insurance rate. Also known as adverse selection. The selection of such risks is adverse because the rate is inadequate.In other word, tendency of people with significant potential to file claims wanting to obtain insurance coverage. For example, those with severe health problems want to buy health insurance, and people going to a dangerous place such as a war zone want to buy more life insurance. Companies employing workers in dangerous occupations want to buy more worker's compensation coverage. In order to combat the problem of adverse selection, insurance companies try to reduce their exposure to large claims by either raising premiums or limiting the availability of coverage to such applicants.
Why did Charles Darwin started the theiry of evolution?
To explain the species problem, " that mystery of mysteries " which was the natural history problem of the day. From his observations and experiments Darwin proposed his theory of evolution by natural selection, which provided a mechanism for the observed fact of evolution.
Explain the 6 steps in problem solving in office management?
(a) Explain the 6 steps in problem solving
How can you use selection in a sentence?
This store carries a wider selection than that store. I'm having a bit of a problem with making my selection.
Explain how you found your answer to problem 19?
I guessed
Can you explain Fibonacci's rabbit problem and find a diagram to explain?
its either 233 or 754
What is the selection of a strategy by the government for addressing a problem called?
agenda adoption
The selection of a strategy by the government for addressing a problem is called?
angenda adoption
What is the selection of a strategy by the government for addressing for a problem called?
agenda adoption
What is the selection of the strategy by the government for addressing a problem called?
agenda adoption
