Market power can reduce the symptoms of adverse selection. To see the relationship, consider the incentive for a firm to offer a product that appeals to low-risk consumers and leads high-risk consumers to purchase insurance elsewhere. This incentive problem can be addressed through regulation...

Publicly subsidized private health insurance markets in the United States were created under the assumption that competition would maximize consumer welfare. However, consumers in these markets are willing to pay thousands of dollars to stay in the same health plan, even after accounting for...