Generalizing using statistical discrimination is:
A)a rational response to being on the wrong end of an information asymmetry.
B)an irrational response and always leads to loss of surplus.
C)a rational response,although government always steps in to prevent it.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

Generalizing using statistical discrimination may be a rational response to being on the wrong end of an information asymmetry, as it allows an individual to make decisions based on limited information. While it may lead to some loss of surplus, it can still be a reasonable strategy in certain situations.

Generalizing Using Statistical Discrimination Is