Suppose a firm offers its workers a cafeteria plan in which it allows workers to allocate a set amount of fringe benefit money toward specific insurance. Mary, who has five kids needing braces, selects the family dental coverage. This is an example of the

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Suppose a firm offers its workers a cafeteria plan in which it allows workers to allocate a set amount of fringe benefit money toward specific insurance. Mary, who has five kids needing braces, selects the family dental coverage. This is an example of the adverse selection problem.

This is a term in economics that can be understood as when there is different information or understanding between the sender and the receiver. This different comprehension of the subject at hand distorts the core of the information. It can make people decide on something different because of a lack of comprehension about what it is being said.

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