Kaneshi Hartfield is a sales representative with Plain Truth Advertising.She is an excellent sales representative,but corporate management feels that she is too independent.But they are afraid to act,since Kaneshi maintains her own list of key contacts.This is an example of:
A)an asymmetric information problem.
B)different time horizons of the sales representative and management.
C)the free rider problem.
D)the failure of bargaining.

Question

Quizplus · Accepted Answer

This situation exemplifies an asymmetric information problem because Kaneshi Hartfield possesses unique and valuable information (her list of key contacts) that corporate management does not have. This information asymmetry gives her an advantage and makes management hesitant to address her independence, as they fear losing access to her contacts.

Kaneshi Hartfield Is a Sales Representative with Plain Truth Advertising