question archive A firm deciding to hire a secretary bases its decision on how well the candidate is trained on certain software
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A firm deciding to hire a secretary bases its decision on how well the candidate is trained on certain software. Does this practice address adverse selection or moral hazard?
This practice typically addresses the problem of adverse selection. The secretary has to decide which choice would be optimal in training the candidate. There are various steps to train the candidates. But the secretary needs to extract each pro and cons of each method. So, he has to find out which method would be proven as apple or lemon for the firm.