Which of the following is a method used to overcome the problem of asymmetric information?
A)Creating an informal organizational structure
B)Pooling of risk
C)Self-selection
D)Signaling
E)Outsourcing

Question

Quizplus · Accepted Answer

Signaling is a method used to overcome the problem of asymmetric information. It involves the use of actions or signals that convey information to the other party about the quality or characteristics of a product or service. Examples of signaling include branding, advertising, and reputation building. By signaling, a seller can convey information about their product or service that is not readily available to the buyer, and in doing so, can overcome the problem of asymmetric information. The other options do not directly address the problem of asymmetric information.

Which of the Following Is a Method Used to Overcome