Some companies subject their applicants to extensive tests. Why?
A)To reduce the informational asymmetry between the firm and the applicant.
B)To screen the applicant to avoid the problem of adverse selection.
C)To gather more information about the applicant.
D)All of the above.

Question

Quizplus · Accepted Answer

Companies subject their applicants to extensive tests to reduce informational asymmetry between the firm and the applicant by gathering more information about the applicant, and also to screen the applicant to avoid the problem of adverse selection. Therefore, all of the options (A, B, and C) are correct.

Some Companies Subject Their Applicants to Extensive Tests