Which of the following reduces the effects of asymmetric information?
A) repeat purchases
B) warranties
C) building a reputation
D) All of the above.

Question

Quizplus · Accepted Answer

Repeat purchases, warranties, and building a reputation are all mechanisms that reduce the effects of asymmetric information. Repeat purchases help to establish trust between the buyer and the seller, while warranties provide assurance that the product will perform as expected. Building a reputation through good customer service and quality products can also help to establish trust and reduce the effects of asymmetric information. Thus, all of the above options help reduce the effects of asymmetric information.

Which of the Following Reduces the Effects of Asymmetric Information