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In this article, we take a look at what the concept of adverse selection really means and give some. Examples to illustrate how it can occur. Adverse selection is a marketing phenomenon wherein your company is advertising something, but the customer might choose something else altogether. adverse selection phenomenon directly affects your ad spends and you have to take it into consideration.
Adverse selection is a case of asymmetric information. It occurs when both parties assign or are subject to a different probability of a same (normally adverse). Event occurring. In this case, the agent that has the best information is clearly at an advantage.