{"id":5449,"date":"2024-07-15T15:42:25","date_gmt":"2024-07-15T15:42:25","guid":{"rendered":"https:\/\/www.novonon.com\/blog\/?p=5449"},"modified":"2024-07-15T15:42:25","modified_gmt":"2024-07-15T15:42:25","slug":"toward-a-broader-conception-of-adverse-selection","status":"publish","type":"post","link":"https:\/\/www.novonon.com\/blog\/2024\/07\/15\/toward-a-broader-conception-of-adverse-selection\/","title":{"rendered":"Toward a Broader Conception of Adverse Selection"},"content":{"rendered":"<blockquote><p>Adverse Selection is the phenomenon in which information asymmetries in non-cooperative environments make trading dangerous. It has traditionally been understood to describe financial markets in which buyers and sellers systematically differ, such as\u00a0a market for used cars in which sellers have the information advantage, where resulting feedback loops can lead to market collapses.<\/p>\n<p>In this post, I make the case that adverse selection effects appear in many everyday contexts beyond specialized markets or strictly financial exchanges. I argue that modeling many of our decisions as taking place in competitive environments analogous to financial markets will help us notice instances of adverse selection that we otherwise wouldn\u2019t.<\/p><\/blockquote>\n<p><em><a href=\"https:\/\/bayesshammai.substack.com\/p\/conditional-on-getting-to-trade-your#footnote-anchor-1-142626215\">Toward a Broader Conception of Adverse Selection<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Adverse Selection is the phenomenon in which information asymmetries in non-cooperative environments make trading dangerous. It has traditionally been understood to describe financial markets in which buyers and sellers systematically differ, such as\u00a0a market for used cars in which sellers have the information advantage, where resulting feedback loops can lead to market collapses. In this [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-5449","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3pfIY-1pT","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/posts\/5449","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/comments?post=5449"}],"version-history":[{"count":1,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/posts\/5449\/revisions"}],"predecessor-version":[{"id":5450,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/posts\/5449\/revisions\/5450"}],"wp:attachment":[{"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/media?parent=5449"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/categories?post=5449"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.novonon.com\/blog\/wp-json\/wp\/v2\/tags?post=5449"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}