How Can Signalling Theory Explain the Advertising Strategies of a Firm

question 86

Multiple Choice

How can signalling theory explain the advertising strategies of a firm that produces a good quality product

• A)It is not a good example of asymmetric information.
• B)It has more to gain by signalling (advertising) than does a firm with an inferior product.
• C)It will never signal (advertise), regardless of the cost of the signal.
• D)It will signal (advertise) only if the cost of the signal is very low.

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Definitions:

Organizational Socialization

This is the process by which new employees learn the values, norms, and required behaviors which permit them to participate as members of an organization.

Member

An individual who belongs to a group, organization, or community and typically has certain rights, responsibilities, or roles within it.

Socialization Agents

Individuals, groups, or institutions that play roles in integrating people into the social structure, helping them to adopt the behaviors and norms of society.

Co-Workers

Individuals who work together in the same organization or on the same team, often sharing responsibilities and goals.