Contagious Adverse Selection
说明资产市场中即使少量逆向选择也会产生腐蚀效应，导致交易完全崩溃，并探讨了传染性逆向选择和有毒资产在金融危机中的作用。
We illustrate the corrosive effect of even small amounts of adverse selection in an asset market and show how it can lead to the total breakdown of trade. The problem is the failure of “market confidence,” defined as approximate common knowledge of an upper bound on expected losses. Small probability events can unravel market confidence. We discuss the role of contagious adverse selection and the problem of “toxic assets” in the recent financial crisis.