Types of Financial Market Failure. Video covering the Types of Financial Market Failure including speculation, bubbles, asymmetric information, negative externalities and market rigging Twitter: / econplusdal Facebook: www.facebook.c...
and also does it always have to leveraged? can it be normal deal? cuz many businesses may not be willing to do leveraged deals.. so for that how will it go?
i think its the idea of if you see people buying assets for low and selling for higher, it increases demand for these assets because of potential high profits made from these assets which means demand shifts right causing price to increase and its a continuous cycle until they realise that there are actually worthless, causing prices to drop then people panic sell which means price plummets. (It's about expectations)
With the adverse selection stuff, surely higher premiums on insurance wouldn't drive away healthy consumers bc aren't premiums tailored to a customer? So the healthier customers wouldn't have high premiums anyways, only the poor health ones would
