Concepts moral hazard and adverse selection

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Reference no: EM131978681

1. Define the concepts 'moral hazard' and 'adverse selection'. How could each arise in the health insurance industry and what may insurance companies do to guard against them?

2. Problems of asymmetric information cause difficulties in regulation of the Health Service. Explain the nature of the asymmetries, and the problems that arise for government in attempting to protect consumers as both tax-payers and potential patients.

Reference no: EM131978681

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