People faced with adverse selection use _____ to deal with it.
A)screening
B)signals
C)reputation
D)screening,signals,and reputation

Question

Quizplus · Accepted Answer

People faced with adverse selection use a combination of screening, signals, and reputation to deal with it. Screening involves gathering information and conducting tests to screen out high-risk individuals. Signals are used by individuals to convey information about themselves to potential partners, such as education or job experience. Reputation refers to the established trustworthiness or reliability of an individual, institution or product. By using a combination of these strategies, individuals can mitigate the effects of adverse selection and reduce their risk of selecting a low-quality partner.

People Faced with Adverse Selection Use _____ to Deal with It