which of the following is an example of signaling? choose all that apply. There is more than one coeect answer.
A.Haley uses her 4.0 grade point average to land a new job
B. Tommy's Tea Shop advertises by recording the testimonials of satisfied customers.
C. Fred's Used Cars offers a warranty on every car sold
D. Jo decides to go to graduate school so her future employer will know that she is smart and a hard worker.
All of the options are example of signalling.
In contract theory, an agent conveys an information to a principal to eliminate asymmetric information.
In option A, Haley uses her 4 GPA to signal her ability,
In option B, Tommy uses testimonials of satisfied customers to signal that they're good service provider.
In Option C, the warranty on every sold acts a signal that they're selling good quality cars.
In Option D, acquiring a degree from grad school again serves an example of signalling tool since it can signal something about Jo's signalling ability.
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