Which of the following is true about signaling?

Question

Quizplus · Accepted Answer

Signaling is a way for a party (often a seller) to convey some truthful information about itself or its product to another party (often a buyer) to help the latter make a more informed decision. It's a credible source of information because it often involves some cost or action that would not be taken if the signaler were not truthful, thereby helping to differentiate between high-quality and low-quality goods or sellers.

Which of the Following Is True About Signaling