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Towards a Broader Conception of Adverse Selection
wowsuch2y913

I think you might be slightly misunderstanding the intention of the subway example (1.) - the "market" described is one of commuters for seats, and the example is noting that if some subway seats appear underpriced -- i.e. commuters are choosing to cram together in fewer cars rather than equalizing their density over all available subway cars -- then those commuters likely know something about the unused seats that you don't know.

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