Rachel Goes for a Job Interview and Knows a Lot

question 10

Multiple Choice

Rachel goes for a job interview and knows a lot about the job she is applying for. The woman who interviews her is filling in for another employee and knows very little about Rachel. We might say the woman conducting the interview is likely to have what kind of situation?

• A)The interviewer is in a situation of moral hazard, since Rachel may turn out to be a poor employee.
• B)The interviewer is facing adverse selection, since she knows nothing about Rachel.
• C)The interviewer has systemic information, since she can ask probing questions of Rachel.
• D)The interviewer has asymmetric information as she knows less about Rachel than Rachel knows of herself.