There is frequent confusion about the terms asymmetric information, moral hazard, and adverse selection. Asymmetric information is the cause, while moral hazard and adverse selection are the outcome.<br><br>For this discussion, your focus will be to think through what these have to do with hiring a police officer.<br><br>Instructions<br>Consider the following statement:<br><br>Many police officer positions require the applicant to have a college degree even though the tasks of a police officer rarely call upon college course material.<br><br>In your discussion post, address the following:<br><br>
1. Why don’t police departments increase their applicant pool by dropping this requirement?<br>
2. How does this relate to asymmetric information, moral hazard, and adverse selection?<br>
3. How do Type I and Type II errors (and the human tendency to be risk-averse) relate to your answer?<br><br>For discussion
