Question

Inez is hosting a jewelry party during which friends will come to her home and (hopefully) buy jewelry that she recommends. In this situation, there are many different ways in which perceptions of trustworthiness are being manipulated. Which of the following best describes why Inez might be successful in her sales efforts?

(a) Inez has a degree in jewelry design.
(b) Inez provides detailed information about each piece of jewelry.
(c) Inez has celebrity endorsements for her jewelry.
(d) Inez offers a money-back guarantee.

Answer 1

Inez can successfully conduct sales by providing detailed information and offering a money-back guarantee, as these mechanisms reassure buyers by reducing the risk of imperfect information and assuring product quality.

Step-by-step explanation:

Inez might be successful in her sales efforts at her jewelry party for several reasons, and the mechanisms that can increase trust and reduce the risk of imperfect information are relevant here. Option (b), providing detailed information about each piece of jewelry, can build trust by educating the potential buyers on the value and authenticity of the jewels, thereby decreasing the information gap. Similarly, option (d), offering a money-back guarantee, can reassure buyers because it reduces the perceived risk of the transaction and shows Inez's confidence in her products. On the other hand, having a degree in jewelry design (option a) and having celebrity endorsements (option c) can enhance reputation, which also plays a role in trust-building, though they do not directly address information asymmetry as strongly as detailed product information and guarantees do.