Gary is a recent college graduate. After six months at his new job, he has finally saved enough to buy his first car.
a. Gary knows very little about the differences between makes and models. How could he use market signals, reputation, or standardization to make comparisons?
b. You are a loan officer in a bank. After selecting a car, Gary comes to you seeking a loan. Because he has only recently graduated, he does not have a long credit history. Nonetheless, the bank has a long history of financing cars for recent college graduates. Is this information useful in Gary’s case? If so, how?