A "signal" will not work to sort good from bad workers if
A) the signal is as costly to good workers as to bad workers.
B) bad workers are more risk-averse than good workers.
C) the signal is excessively expensive to bad workers.
D) good workers are more productive than bad workers.

Question

Quizplus · Accepted Answer

If the signal is equally costly to both good and bad workers, then it does not provide any useful information for distinguishing between the two groups. Good workers may be discouraged from sending the signal due to the cost, while bad workers may still choose to send the signal despite low productivity. As a result, the signal fails to effectively sort good from bad workers.

A "Signal" Will Not Work to Sort Good from Bad