The Seller of an Existing House Claims That It Is

Multiple Choice

The seller of an existing house claims that it is in great shape, and he is offering a 2-year warranty on the house. His statements about the quality of his house are likely to be:

A) credible even in the absence of a warranty.
B) overstated.
C) true because offering a warranty is a costly-to-fake signal.
D) untrue because otherwise he would not offer the warranty.