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Signals solve the adverse selection problem - if the signal is an advertisement placed in the New York Times or other top-tier publication. - only

Signals solve the adverse selection problem

- if the signal is an advertisement placed in the New York Times or other top-tier publication.

- only if the signal is viewed as credible.

- when the signal is expensive to produce.

- if the signaling firm is known to be a profit-maximizer.

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