Some companies subject their applicants to extensive tests.Why?
A) to reduce the informational asymmetry between the firm and the applicant
B) to screen the applicant to avoid the problem of adverse selection
C) to gather more information about the applicant
D) All of the above.

Question

Quizplus · Accepted Answer

All of the given options are valid reasons why companies subject their applicants to extensive tests. By reducing the informational asymmetry between the firm and the applicant, the company gains a better understanding of the applicant's skills and abilities. By screening applicants, the company avoids the problem of adverse selection, where individuals with characteristics undesirable to the firm are more likely to apply. By gathering more information about the applicant, the company can make more informed hiring decisions.

Some Companies Subject Their Applicants to Extensive Tests.Why