Consider a setting where principals compete for workers. Each worker may have a high or a low productivity. This is captured assuming that high ability workers have a higher probability of generating a high value output relative to low ability workers. Which of the following statement is correct?

options:

If the symmetric information contracts were implemented when there is asymmetric information, the low ability workers would pretend to have a high ability.

If the symmetric information contracts were implemented when there is asymmetric information, the high ability workers would pretend to have a low ability.

If the symmetric information contracts were implemented when there is asymmetric information the workers would stick with the contracts that are meant for them and we would reach the first best again.

If the symmetric information contracts were implemented when there is asymmetric information, the low ability workers would pretend to have a high ability while the high ability workers would pretend to have a low ability.