Ratings and reviews can fail at mitigating moral hazard if:
A) ratings fully inform consumers of the quality of the product.
B) reviewers always review honestly.
C) not all products are reviewed.
D) ratings are faked or exaggerated.

Question

Quizplus · Accepted Answer

Ratings and reviews may fail to mitigate moral hazard if the ratings are not genuine and have been falsified or exaggerated. This can lead to misleading information being given to consumers, which can then result in poor decisions being made.

Ratings and Reviews Can Fail at Mitigating Moral Hazard If