27 | Principal-Agent Framework
Asymmetric Information and Health Insurance
In this video, we discuss asymmetric information, adverse selection, and propitious selection in relation to the market for health insurance. Health insurance consumers come in a range of health, but to insurance companies, everyone has the same average health.
NewPrincipal–Agent Problems and Industry Structure
Principal–agent problems are the result of delegation. Principals want agents to do something for them. The problem arises when the agent doesn't do what the principal wants. This video looks at how industry structure can be used to ensure that agents do what the principal desires.