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Asymmetric Information: Adverse Selection and Moral Hazard
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Asymmetric Information: Adverse Selection and Moral Hazard
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17. Asymmetric Information, Voting, and Public Choice / Asymmetric Information: Adverse Selection and Moral Hazard / Problem 7
Problem 7
Which mechanism can help reduce moral hazard in car insurance?
A
Providing full coverage without any conditions.
B
Removing all monitoring of driver behavior.
C
Offering lower premiums for riskier drivers.
D
Implementing a deductible that requires insured individuals to pay a portion of the loss.
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