Statistical discrimination:
A)can limit individuals' opportunities simply because they belong to a certain group.
B)can be a rational response to information asymmetry.
C)is not always a legal solution to information asymmetry.
D)All of these are true.

Question

Quizplus · Accepted Answer

Statistical discrimination involves making decisions about individuals based on statistical averages of the group they belong to, which can limit their opportunities. It can be seen as a rational response to information asymmetry, where decision-makers use group statistics as a proxy for missing information about individuals. However, it is not always legal, as it can lead to unfair treatment or discrimination against certain groups, violating anti-discrimination laws.

Statistical Discrimination