Implications of Asymmetric Information Adverse selection-form of market failure resulting from asymmetric information:if insurance companies must charge a single premium because they can not distinguish between high-risk and low-risk individuals,more high-risk individuals will insure,making it unprofitable to sell insurance. Implications of Asymmetric Information Adverse selection - form of market failure resulting from asymmetric information: if insurance companies must charge a single premium because they can not distinguish between high-risk and low-risk individuals, more high-risk individuals will insure, making it unprofitable to sell insurance