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ADVERSE SELECTION: When a negotiation between two people with different amounts of information, that is, asymmetric information, restricts the quality of the good traded. This typically happens because the person with more information is able to negotiate a favorable exchange. This is frequently referred to as the "market for lemons."
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ADVERSE SELECTION An inefficient, bad, or adverse outcome of a market exchange that results because buyers and/or sellers make decisions based on asymmetric information. This commonly results in a market that exchanges a lesser quality good, what is termed the market for lemons. Two related problems resulting from asymmetric information are moral hazard and the principal-agent problem. Two methods of lessoning the problem of adverse selection are signalling and screening.
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BLACK DISMALAPOD
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either a pair of red goulashes with shiny buckles or a handcrafted bird feeder. Be on the lookout for poorly written technical manuals.
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
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"There's only one corner of the universe you can be certain of improving and that's your own self. " -- Aldous Huxley, writer
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ATM
Automated Teller Machine
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