f. Now replicate your picture two times: Once for a patient where the moral hazard problem is
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f. Now replicate your picture two times: Once for a patient where the moral hazard problem is small, and once for a patient where it is large. If insurance companies cannot tell the difference between these two individuals, how does this asymmetric information potentially give rise to adverse selection?
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Related Book For 
Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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