Lessons Learned

• Adverse selection occurs when you attract those with whom you least want to interact.

• When you make offers to job applicants or customers, you should consider the type of person most likely to accept your offer. Will they be more likely than average to have undesirable traits?

• People desperate to interact with you are often the ones with whom you should least want to deal.

• Playing hard to get can overcome adverse selection by convincing others that you are not desperate and thus not undesirable.

• Adverse selection is caused by hidden information and so can be remedied by information acquisition.