Adverse Selection
The classic paper on adverse selection is George Akerlof's "The Market for Lemons" from 1970, which brought informational issues at the forefront of economic theory. It discusses two primary solutions to this problem, signaling and screening.
Read more about this topic: Information Asymmetry
Famous quotes containing the words adverse and/or selection:
“[Religious establishment] is adverse to the diffusion of the light of Christianity ... [because] with an ignoble and unchristian timidity it would [be] circumscribed, with a wall of defence, against the encroachments of error.”
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“Every writer is necessarily a critic—that is, each sentence is a skeleton accompanied by enormous activity of rejection; and each selection is governed by general principles concerning truth, force, beauty, and so on.... The critic that is in every fabulist is like the iceberg—nine-tenths of him is under water.”
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