associated adverse selection
English translation: bad results due to asymmetrical information (associated with potential gridlock)
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| 05:32 Jun 8, 2010 |
| English language (monolingual) [PRO] Bus/Financial - Finance (general) / Islamic Banking | |||||||
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|  Selected response from: Catharine Cellier-Smart Reunion Local time: 10:53 | ||||||
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| SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
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| 3 +5 | bad results due to asymmetrical information (associated with potential gridlock) |
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Answers
1 hr confidence: 
peer agreement (net): +5
peer agreement (net): +5bad results due to asymmetrical information (associated with potential gridlock) Explanation: asymmetrical information that is, between buyers and sellers see : "Adverse selection a situation where an informed party benefits in an exchange by taking advantage of knowing more than the other party" http://keyterms.nelson.com/glossary.aspx?isbn=0176500227&cha... "Adverse selection, anti-selection, or negative selection is a term used in economics, insurance, statistics, and risk management. It refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information (i.e. access to different information): the "bad" products or customers are more likely to be selected. A bank that sets one price for all its checking account customers runs the risk of being adversely selected against by its low-balance, high-activity (and hence least profitable) customers" http://en.wikipedia.org/wiki/Adverse_selection "Adverse selection arises from information asymmetry in a market, such as the credit market. It is the problem a lender has in distinguishing between good-risk and bad-risk investments, because the borrower has information that the lender does not." http://www.uncdf.org/mfdl/workbook/pages/glossary.htm "Adverse selection With respect to mortgage pricing, a process that results in lenders obtaining only the "worst" loans. For example, a lender using average-cost pricing is taking a risk that the best loans will go to a competing firm that uses risk-based pricing to offer those borrowers a lower interest rate. The remaining business available to the cost-based pricing company represents an "adverse" pool of loans." http://www.freddiemac.com/smm/a_f.htm "Adverse selection: a term used in economics and insurance that refers to a market process in which bad results occur due to information asymmetries between buyers and sellers: the "bad" products or customers are more likely to be selected" http://mro.uservices.com/glossary.php -------------------------------------------------- Note added at 1 hr (2010-06-08 07:11:59 GMT) -------------------------------------------------- asymmetrical information not only between buyers and sellers but also between borrowers and lenders or just two different parties. |
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