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Adverse selection is a concept in economics, insurance, and risk management, which captures the idea of a "rigged" trade. When buyers and sellers have access to different information (asymmetric information), traders with better private information about the quality of a product will selectively participate in trades which benefit them the most (at the expense of the other trader). A textbook example is Akerlof's market for lemons. Buyers sometimes have better information about how much benefit they can extract from a service in which case the "bad" customers are more likely to apply for the service. For example, an all-you-can-eat buffet restaurant which sets one price for all customers risks being adversely selected against by high appetite (and hence least profitable) customers. Another example is in offering health insurance, the types of customers most likely to apply are those who are most prone to accidents. In both cases, the seller suffers from adverse selection should protect himself by screening customers or by identifying credible signals of quality, see signaling games and screening games. An example where the buyer is adversely selected against is in financial markets. A company is more likely to offer stock when managers privately know that the current stock price exceeds the fundamental value of the firm. Uninformed investors rationally demand a premium to participate in the equity offer. ==Insurance== The term "adverse selection" was originally used in insurance. It describes a situation where an individual's demand for insurance is positively correlated with the individual's risk of loss. This can be illustrated by the link between smoking status and mortality. Non-smokers typically live longer than smokers. If a life insurance company does not vary prices according to smoking status, its life insurance will be more valuable for smokers than for non-smokers. Smokers will have greater incentives to buy insurance from that company and purchase insurance in larger amounts than non-smokers. The average mortality rate increases, leading to losses for the company. In response, the company may increase premiums however, higher prices causes responsible non-smoking customers to cancel their insurance, which can exacerbate the adverse selection problem and lead to a collapse in the insurance market. To counter the effects of adverse selection, insurers must offer insurance premiums that are proportional to the customer's risk of accident. The insurer must screen and distinguish high-risk individuals from low-risk individuals. Medical insurers for instance, ask a range of questions and may request medical or other reports on individuals who apply to buy insurance, so that the premium can be varied accordingly, and any unreasonably high or unpredictable risks rejected altogether. This risk selection process is one part of underwriting. In many countries, insurance law incorporates an "utmost good faith" or ''uberrima fides'' doctrine, which requires potential customers to answer any underwriting questions asked by the insurer fully and honestly. Dishonesty may be met with refusals to pay claims. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Adverse selection」の詳細全文を読む スポンサード リンク
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