Market Signaling

4 years ago
Microeconomics

Market signaling – Process by which sellers send signals to buyers conveying information about product quality.

Moral hazard – When a party whose actions are unobserved can affect the probability or magnitude of a payment associated with an event. (ex. if my home is fully insured against theft, I may be less diligent about blocking doors when I leave, and I may choose to install an alarm system)

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Bijay Satyal
Bijay Satyal
Dec 1, 2021
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