Which characterization best describes the phenomenon of signalling
A)It refers to actions taken by an informed party to conceal private information.
B)It plays a role in certain theories of education.
C)It is the same as the phenomenon of screening.
D)It is unrelated to problems of asymmetric information.

Question

Quizplus · Accepted Answer

Signalling involves actions taken by an informed party to reveal private information to an uninformed party, often to reduce problems of asymmetric information. It plays a role in theories of education, where obtaining a degree can signal competence to employers.

Which Characterization Best Describes the Phenomenon of Signalling