Which of the following is a possible solution to the adverse selection problem?
A)Screening
B)Signaling
C)All of the above
D)None of the above

Question

​Which of the following is a possible solution to the adverse selection problem?
A)​Screening
B)Signaling
C)All of the above
D)None of the above​

Quizplus · Accepted Answer

Both screening and signaling can help mitigate the adverse selection problem. Screening involves gathering information about potential customers to determine their risk level, while signaling involves providing credible information to potential customers to signal a company's high quality or low risk. Using both of these solutions together can help an organization to better manage adverse selection.

​Which of the Following Is a Possible Solution to the Adverse

Which of the Following Is a Possible Solution to the Adverse