In economics, insurance, and risk management, adverse selection is a market situation where buyers and sellers have different information, so that a participant might participate selectively in trades which benefit them the most, at the expense of the other party. The party without the information is worried about an unfair ("rigged") trade, which occurs when the party who has all the information uses it to their advantage. The fear of rigged trade can prompt the worried party to withdraw from the interaction, diminishing the volume of trade in the market. This can cause a knock-on effect and through a positive feedback loop, will lead to the unraveling of the market. An additional implication of this potential for market collapse is that it can act as an entry deterrence that leads to higher profit margins for existing competitors without additional entry.