Which of the Following Events Best Exemplifies the Concept of Signaling

question 30

Multiple Choice

Which of the following events best exemplifies the concept of signaling?

• A) A college student's parents, having learned that their child is short of money, send her a check for $1,000.
• B) A woman, who is trying to win the love of a certain man, buys him a very personal gift.
• C) A grocery store maintains a policy of examining the driver's license of everyone who writes a personal check to purchase his groceries.
• D) A university maintains a policy of considering for admission only those students who graduated among the top ten percent of their high school class.

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Definitions:

Pure Strategy Equilibria

A concept in game theory where each player chooses a single strategy that results in the best outcome for them, given the strategies chosen by other players in the game.

Swerve

A sudden change in direction or position, typically used to avoid collision or an obstacle.

Drive Straight

a directive or action where one proceeds forward without turning, often used in navigation or driving instructions.

Nash Equilibrium

A concept within game theory where each player's strategy is optimal, given the strategies of all other players, leading to a situation where no player has anything to gain by changing only their own strategy.