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Asymmetric information, DEFINITION - Coggle Diagram

- - - - Death Spiral occur
        
        Market collapses
      - Buyers conclude to not buy used car
  - - - Gives guarantee for the quality
      - Sales continues
  - - - cost almost the same for everyone
        
        healthy individuals will not to buy as its expensive
        
        agency reduce the price, where it is not profitable to the agency
        
        death spiral & market failure happens
        
        no any prices attracts the customer
    - - group health insurance to employee by employer.
        
        benefit : minimal adverse selection problem, employer buy insurance regardless of health issue.
        
        Disadvantage: lose insurance when lose job
      - most recent solution: Affordable care act or Obamacare
        
        Everyone has to buy insurance
      - Health check-up to know more regarding their health, so can charge accordingly
        
        Disadvantages: reveal too much of information on health
        
        Sick people burdened to pay more as well