Give an Example of Adverse Selection and an Example of Moral

question 15

Essay

Give an example of adverse selection and an example of moral hazard using homeowners insurance.

---

Definitions:

Variable-ratio Schedule

A schedule of reinforcement where a response is reinforced after an unpredictable number of responses, leading to a high and steady rate of response.

Reinforcement

In behavioral psychology, a procedure or consequence that strengthens a behavior, making it more likely to occur again in the future.

Responses

Reactions or actions of an organism or system to stimuli or changes in the environment.

Reinforced Schedule

A plan or strategy in operant conditioning that outlines how and when reinforcement (rewards or punishments) will be given for certain behaviors.