adverse selection means: A situation where sellers possess relevant information about a product’s quality that buyers do not have or vice-versa. (in Stock Market Dictionary)

What else does adverse selection mean?

  • Sellers have a tendency to sell low-quality goods in order to get the most profitable clients. Negative selection is caused by the inability for buyers to distinguish between high-quality or low-quality products, and sellers not being able to identify between profitable and non-profitable customers. (in Merlin Dictionary)