Indicate whether the statement is true or false, and justify your answer. In a RothschildStiglitz model with
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Indicate whether the statement is true or false, and justify your answer.
In a Rothschild–Stiglitz model with asymmetric information and heterogeneous risk types, the frail population would be worse off if insurance companies were suddenly able to distinguish between the two types of customers, because they could no longer pretend to be healthy.
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