Pooling Equilibrium
A market outcome in which all customer types (or all worker types, or all borrower types) accept the same contract priced at the population average. Pooling equilibria require either a participation mandate or sufficient information opacity to prevent the safer types from exiting; without those conditions, voluntary pooling typically unravels per the Akerlof lemons dynamic. Community-rated health insurance with an individual mandate and government-backstopped flood insurance are common real-world pooling structures.
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Related terms
Ambiguity Aversion · Anchored Assumption · Asset Beta · Bank ROE Spread · Banker Pitch Deck · Beta
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