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Adverse Selection Problem

Prof. LR:- Adverse Selection is a problem where one side is unable to complete a transaction because it will attract agents that will make the transaction unprofitable. Can you quote an example? Arbit Choudhury:- Yes Sir. The BJP is unable to make Narendra Modi the PM candidate because it will attract the wrath of Nitish Kumar and make the whole transaction unprofitable.

Prof. LR:- Adverse Selection is a problem where one side is unable to complete a transaction because it will attract agents that will make the transaction unprofitable. Can you quote an example? Arbit Choudhury:- Yes Sir. The BJP is unable to make Narendra Modi the PM candidate because it will attract the wrath of Nitish Kumar and make the whole transaction unprofitable.
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