Biased Selection
The market imperfection that results from the uneven grouping of risks among competing subscribers. Biased selection includes favorable selection (attracting good risks and repelling bad ones) as well as adverse selection (the reverse). Biased selection can occur naturally, according to historical or accidental patterns, or it can occur strategically, according to conscious choices by either subscribers or insurers.
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Contributors: Prab R. Tumpati, MD
