As Akerlof argues, sellers who have a lemon, of course, know they have lemon but are not willing to tell the truth about the condition of their auto and, for the short selling period involved, can put their auto in a satisfactory condition that
approximates the normal condition of the auto that are not lemons. In subsequent literature, this problem called the _ problem.
a. informational asymmetry
b. agency
c. moral hazard
d. certification
C
You might also like to view...
Define locus of control, self-efficacy, and self-esteem. Explain how a manager might deal with each of these personality traits at work. Describe how you would rate yourself on each of these dimensions, and explain why.
What will be an ideal response?
Maximizing profits has been and continues to be a dominant factor in price setting
Indicate whether the statement is true or false
What is the best way to achieve the efficiency potential of a global strategy?
A. Local managers should be given considerable latitude for executing strategies for the country markets they are responsible for. B. The best identified resources and capabilities should be centralized at headquarters. C. Resources and best practices should be shared, value chain activities should be integrated, and capabilities should be transferred from one location to another as they are developed. D. Value chain activities must be dispersed across many countries to elevate cost control management as a primary focus in all countries. E. Managerial attention should be focused on objective-setting, specifically oriented toward production practices.
A study by the American Institute of Plant Engineers showed that there was no correlation between an increase in the commitment to safety by managers and a decrease in accidents.
Answer the following statement true (T) or false (F)