Final answer:
Employers conduct reference checks primarily because past performance is highly indicative of future performance, aiming to reduce the asymmetric information in the hiring process.
Step-by-step explanation:
The main reason why an employer would want to conduct a reference check is A. Because past performance is a strong indicator of future performance. In the context of labor market dynamics, there is a concept known as asymmetric information, where employers cannot ascertain key attributes of a prospective employee until after they have been hired. Employers rely on reference checks to gain insights into a candidate's energy level, work ethic, and other critical attributes. Preferring candidates with a degree from reputable institutions or with a history of accolades serves as a pre-screening method to signal hard work and ability, thereby reducing uncertainty.