Scientific Definition
Asymmetric information attracts the worst counterparties.
Plain-English Definition
Asymmetric information attracts the worst counterparties.
Feynman Explanation
If only the desperate buy your insurance, you have a pricing problem.
Core Principle
Asymmetric information attracts the worst counterparties.
Mechanisms
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Inputs (Triggers)
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Outputs (Behaviors)
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Behavioral Signature
If only the desperate buy your insurance, you have a pricing problem.
Examples
- Health plans that don't screen end up insuring the sickest pool.
- Loose qualification criteria recruit exactly the customers you can't profitably serve.
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Famous Experiments
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Design Principles
- Use signals (screens, deposits, references) that good counterparties will pay.
Measurement Approaches
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Evidence
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The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Use signals (screens, deposits, references) that good counterparties will pay.
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Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Signals whose value depends on being expensive to fake.
A cost or benefit borne by someone outside the transaction.
Costly actions that credibly communicate hard-to-observe traits.
Behavior that benefits genetic relatives at cost to oneself.
Clear ownership of outcomes, not just tasks.
We defer to perceived expertise, rank, or uniform.
Vastness that exceeds existing schemas dissolves the self briefly.
Negative feedback returns a system toward a target.
Membership in a group is a baseline human need.
Individually rational choices that produce a collectively bad outcome.
We seek tasks where we feel effective and improving.
Competing loyalties that compromise judgment.