If those snags deterred lower-cost individuals from navigating the system to purchase coverage before the open season ended, the reductions in adverse selection
that the implementation of the ACA was expected to bring about might not have been as great.
But Kunreuther, Pauly, and McMorrow show that when insurance regulators themselves don't cause adverse selection
, it tends not to happen.
The criticism continues that these represent “sham” self-insured plans and that a growing number of such plans will contribute to adverse selection
in the group health insurance marketplace.
It can be assumed that both adverse selection
and moral hazard may influence the individual's decision to purchase health insurance.
But, of course, the requirement is a way to avoid adverse selection
- requiring only people in flood plains to purchase the insurance would make it prohibitively expensive.
Based on a sample of IPOs completed from January 1993 to December 2005, we find that a high number of co-managers in the syndicate are associated with a lower spread, lower adverse selection
costs, and a lower probability of informed trading.
Summary paragraph: Alfred Berkeley, chairman of Pipeline Financial Group, explains how the next wave of trading technology - predictive analytics - is reducing adverse selection
and increasing alpha, and could transform the current buyside trading paradigm.
Grounding all analysis in Spence (1973), Akerlof (1970) and Stiglitz's (1990) work on asymmetric information, adverse selection
and signaling, this study examines students' knowledge of transfer and their attainment of that knowledge.
* Market competitive pricing (not necessarily as the market leader) to achieve credit and profitability objectives while avoiding risks of adverse selection
The strategy uses sophisticated logic designed to dynamically avoid adverse selection
while minimising the trade footprint.
Earlier empirical studies on the lemons hypothesis are inconclusive as some of them have found little evidence of adverse selection
. In the used car market context, adverse selection
arises when some sellers having less-than-average quality of cars are willing to sell their cars at any given price.
Veteran journalist MERRILL GOOZNER responds on his blog that "for the public plan to work, Congress will have to regulate the exchanges to mitigate adverse selection
. At the least, that requires insurers of high-risk patients to receive risk adjustment payments.
For these reasons, the individual market is especially susceptible to adverse selection
Second, adverse selection
will occur under a voluntary insurance system.
In theory, adverse selection
arises because those in good health and with low risk of health problems choose not to purchase health insurance because premiums based on average health risks do not adequately reflect their relatively better health.