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Task 4
Signaling is that seller of a product finds a way to demonstrate its product’s high quality, usually through a trusted third party’s unbiased opinion. In the lecture, the professor uses his friend’s experience as an example. His friend has a jewellery store, and her products are all very expensive, thousands of dollars because they are all real. So if someone wants to buy her jewelries, they want to know the products are real for sure, since they’re spending a lot of money on it. But the customers don’t know how to distinguish the real things with fake ones. So she hired an expert who has twenty years of experience in this field to come in and check all her items. The expert certified that everything was authentic. Since this expert didn’t work in the store, it didn’t matter to him if the items were sold or not, so customers are more likely to trust his opinion.