Adverse Selection Means That as a Firm Grows and Adds

question 12

True/False

Adverse selection means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.

---

Definitions:

Sympathetic

Refers to the part of the autonomic nervous system that accelerates heart rate, constricts blood vessels, and raises blood pressure.

Sympathetic

Showing feelings of pity and sorrow for someone else's misfortune; understanding between people; common feeling.

Parasympathetic

Relating to the part of the autonomic nervous system responsible for rest and digestion, counterbalancing the sympathetic nervous system.

Central

In the context of psychology or neuroscience, this could refer to central processes or systems within the brain that are crucial for various cognitive functions.