All of the following are ways for market participants to overcome adverse selection except for which one?

Question

Quizplus · Accepted Answer

Profit-sharing does not directly address adverse selection. Profit-sharing is a compensation plan where a portion of the profits of a company are distributed to employees, which can incentivize employees to work in the best interest of the company. However, this does not necessarily address adverse selection, where one party has more information than the other and takes advantage of that information in the transaction. Screening, certification, and signaling are all methods for market participants to gather information and overcome adverse selection.

All of the Following Are Ways for Market Participants to Overcome