Gibbons recalls the 1992 charges by California authorities that Sears' mechanics

exploiting the mechanics' asymmetric information

repairs to customers and thus earn bonuses. Do

destroy your faith in the integrity of the automobile repair

was the likely cause of these unfortunate recommendations?

a. Mechanics were compensated based on the final condition and expected

customers' automobiles so the mechanics sought to restore

operating condition.

b. Sears' mechanics often had no idea what was wrong with the vehicles and

of replacing everything remotely involved in

c. Sears' mechanics were compensated on the basis of profits from the

the shop, a plan that successfully aligned agent and

, while regrettably damaging those of the customers.

d. It was all a terrible misunderstanding