adverse selection
/ˌædvɜːrs sɪˈlekʃən/
the tendency for higher-risk individuals to seek insurance
adverse selection in a sentence
“Adverse selection can cause insurance markets to collapse.”
Origin of adverse selection
From adverse (Latin adversus turned against) + selection
Related Words
credible threat
a threat that is believable because carrying it out is rational
brinkmanship
pushing a dangerous situation to the edge to force concessions
Schelling point
a solution people converge on without communication
tit for tat
a strategy of cooperating first, then mirroring opponent's previous move
first-mover advantage
the benefit gained by being the initial actor in a market or game
commitment device
a mechanism that binds one to a future course of action