Which of the following can be an example of signaling? Group of answer choices An air-conditioning manufacturer offers a 50-year warranty. A lawyer offers to be paid only if the client wins. A student pursues an MBA. All of the above. None of the above.
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A: Zacks friends are insisting him to drink.Therefore it would be peer pressure.
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A: An economic transaction is a transaction that occurs between two or more people/countries.
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A: Signalling theory refers to the the theory which tells that it is an idea that one party credibly…
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Q: Which of the following is an example of moral hazard? Group of answer choices A. Reckless drivers…
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A: The Coordination of Benefits (COB) clause in group policies is included to eliminate duplication of…
Q: Fred wants to hire Barney to manage his retail store. Barney can apply a high level of effort (at a…
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Q: An insured’s $3,000 outboard motorboat is struck by lightning. Under the insured’s homeowner policy…
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A: The primary goal of purchasing insurance is to restore your financial well-being in the case of a…
Q: How might imperfect information impact price? Group of answer choices Because buyers cannot…
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Q: Most people do not steal because: the marginal utilities of stolen goods diminish as more of…
A: Marginal Utility: - marginal utility is the utility derived by the consumption of an additional…
Q: which of the strategies is effective in reducing moral hazard? gatekeeping cost sharing…
A: Basics:- Effective strategies for moral hazard:- Gatekeeping:- This strategy is used by insurance…
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- One method of solving this problem is through signaling. Signaling is a strategy one uses when they have information. The goal is to use a signal to convince the buyer that the good or service that is being sold is quality and will meet the buyer's wants. Offer an example of a company that uses a signal to help sell its product. What is the signal? What information is the signal trying to convey? Do you think the signal is effective? Why or why not? Does this signal improve market efficiency? Why or why not?The Dean of a College is looking for a tenured professor to teach in the Core Curriculum. Monetary incentives are needed to get someone interested, but how much? The Dean decides to use an auction to do the job. Two professors, equally qualified, applied for the position. The two professors are invited to covertly submit their bids to the Dean. The Dean will give the position to the professor who submits the lower bid (if there is a tie, the job is assigned randomly). The professor who gets the job will be paid his/her own bid. Each professorís reservation value for teaching the course is his/her private information. It is common knowledge that their reservation values are independently and uniformly distributed over [0;100]: So if a professor with a reservation value of 60 wins with a bid of 50, his payoff is 60- 50 = 10: (A) Find a Bayesian Nash equilibrium of the bidding game.(B) Suppose the two professorsíreservation values are 60 and 70, respectively. What are their bids in the…The Dean of Columbia College is looking for a tenured professor to teach in the Core Curriculum. Monetary incentives are needed to get someone interested, but how much? The Dean decides to use an auction to do the job. Two professors, equally qualified, applied for the position. The two professors are invited to covertly submit their bids to the Dean. The Dean will give the position to the professor who submits the lower bid (if there is a tie, the job is assigned randomly). The professor who gets the job will be paid his/her own bid. Each professors reservation value for teaching the course is his/her private information. It is common knowledge that their reservation values are independently and uniformly distributed over [0; 100]: So if a professor with a reservation value of 60 wins with a bid of 50, his payoff is 60 50 = 10: (a) Find a Bayesian Nash equilibrium of the bidding game. (b) Suppose the two professorsíreservation values are 60 and 70, respec- tively. What are…
- Show that expectation damages are efficient with respect to breach, but not efficient with respect to reliance.which of the strategies is effective in reducing moral hazard? gatekeeping cost sharing prospective payment all of the aboveWhich of the following is an example of moral hazard? Group of answer choices A. Reckless drivers are the ones most likely to buy automobile insurance. b. Retail stores located in high-crime areas tend to buy theft insurance more often than stores located in low-crime areas. C. Drivers who have many accidents prefer to buy cars with air bags. D. Employees recently covered by the company health plan start going to the doctor every time they get a cold. E. Company divisions try to improve profitability at each other's expense.
- The Dean is looking for a tenured professor. Monetary incentives are needed to get someone interested, but how much? The Dean decides to use an auction to do the job. Two professors, equally qualified, applied for the position. The two professors are invited to covertly submit their bids to the Dean. The Dean will give the position to the professor who submits the lower bid (if there is a tie, the job is assigned randomly). The professor who gets the job will be paid his/her own bid. Each professor's reservation value for teaching the course is his/her private information. It is common knowledge that their reservation values are independently and uniformly distributed over [0,100]. So if a professor with a reservation value of 60 wins with a bid of 50, his payoff is 60 - 50 = 10. (a) Find a Bayesian Nash equilibrium of the bidding game. (b) Suppose the two professors' reservation values are 60 and 70, respectively. What are their bids in the Bayesian Nash equilibrium youcomputed in…The Dean is looking for a tenured professor. Monetary incentives are needed to get someone interested, but how much? The Dean decides to use an auction to do the job. Two professors, equally qualified, applied for the position. The two professors are invited to covertly submit their bids to the Dean. The Dean will give the position to the professor who submits the lower bid (if there is a tie, the job is assigned randomly). The professor who gets the job will be paid his/her own bid. Each professor's reservation value for teaching the course is his/her private information. It is common knowledge that their reservation values are independently and uniformly distributed over [0,100]. So if a professor with a reservation value of 60 wins with a bid of 50, his payoff is 60 - 50 = 10. (a) Find a Bayesian Nash equilibrium of the bidding game. (b) Suppose the two professors' reservation values are 60 and 70, respectively. What are their bids in the Bayesian Nash equilibrium youcomputed in…Which of the following is an example of adverse selection? Group of answer choices A safe driver taking greater risk in a rental car than his own car. A risk averse driver buying car insurance. An company offering incentive sharing contracts to employees.mployees. McDonald's selling franchises for a flat fee. None of the above.
- Many police officer positions require the applicant to have a college degree even though the tasks of a police officer rarely call upon college course material. Speculate on why police departments do not increase their applicant pool by dropping this requirement and how asymmetric information, moral hazard, and adverse selection are involved?Which of the following statements is correct? a. Adverse selection arises when one party to a transaction hides information from the other. b. Moral hazard arises when one party to a transaction hides actions/behavior to the other. c. Moral hazard leads to insured customers exercising less care than they would if they were not insured. d. All of the above.Adverse selection in insurance business means that those__________ likely to get _________insurance benefits want to purchase insurance the most. Group of answer choices most; large least; small least; large most; small not; any
