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Describe an example of an information asymmetry that could give rise to either adverse selection or moral hazard. Who has the additional information and how
Describe an example of an information asymmetry that could give rise to either adverse selection or moral hazard.
- Who has the additional information and how could they use it to benefit themselves?
- How is the information asymmetry corrected in your example (if it is)?
- Are there other methods of correcting the information asymmetry?
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