Adverse selection online dating

Because of adverse selection, insurers find that high-risk people are more willing to take out and pay greater premiums for policies.

Adverse selection occurs when one party in a negotiation has relevant information the other party lacks.For example, a company’s managers may more willingly issue shares when they know the share price is overvalued compared to the real value; buyers can end up buying overvalued shares and lose money.In the secondhand car market, a seller may know about a vehicle’s defect and charge the buyer more without disclosing the issue.For example, in the realm of corporate finance, a lender has asymmetrical and less-than-ideal information regarding the actual creditworthiness of a borrower.Conquering the dating market — from an economist’s point of view.

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