In the text, the authors present evidence that the market for free agents in professional baseball is subject to the lemons problem. How could a prospective free agent overcome this problem when seeking a new contract?
A) Agree to accept a lower salary with a new team.
B) Rely on standardization to avoid the asymmetric information problem.
C) Decide to negotiate only with their current team.
D) Develop a reputation as a reliable and productive player.

Question

Quizplus · Accepted Answer

Developing a reputation as a reliable and productive player can help overcome the lemons problem, as it signals to potential employers that the player is worth the investment. This can lead to higher contract offers and better bargaining power. Option A is not ideal, as accepting a lower salary may not fully reflect the player's true value. Option B is not applicable in this situation, as standardization does not necessarily address the issue of asymmetric information. Option C limits the player's options and bargaining power.

In the Text, the Authors Present Evidence That the Market