What problems of moral hazard and/or adverse selection arise in your dealings with each of the…

What problems of moral hazard and/or adverse selection
arise in your dealings with each of the following? In each case, outline some
appropriate incentive schemes and/or signaling and screening strategies to cope
with these problems. No mathematical analysis is expected, but you should state
clearly the economic reasoning of why and how your suggested methods work.

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(a) Your financial adviser tells you what stocks to buy
or sell.

(b) You consult a realtor when you are selling your
house.

(c) You visit your doctor, whether for routine check-ups
or treatments.

 

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