Question

A health insurance company decides not to contract with pediatric oncologists in its coverage area. This is an example of the following type of behavior:

a. Moral hazard

b. Adverse selection

c. Rate setting

d. Price fixing

e. Cherry-picking

Answer 1

The term is based on the perceived process of harvesting fruit, such as cherries. The picker would be expected to only select the ripest and healthiest fruits. An observer who only sees the selected fruit may thus wrongly conclude that most, or even all, of the tree's fruit is in a likewise good condition. This can also give a false impression of the quality of the fruit (since it is only a sample and is not a representative sample).A concept sometimes confused with cherry picking is the idea of gathering only the fruit that is easy to harvest, while ignoring other fruit that is higher up on the tree and thus more difficult to obtain .  It is a kind of fallacy of selective attention, the most common example of which is the confirmation bias.

Hence (E) part is a correct answer