A big problem insurance companies run up against is ___________, meaning that the applicant knows more...

A big problem insurance companies run up against is ___________, meaning that the applicant knows more about his own health than the insurance company is legitimately able to gather.

Compensating Differential

Moral Hazard

Comparative Advantage

Asymetric Information

Expert Solution

Ans: Asymetric Information

Explanation:

Asymetric Information means that in a contract one party has more information than the other party. In an insurance contract, the insured (applicant) has more information about himself or herself than the insurer (the insurance company).

Rahul Sunny answered 2 years ago

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