Designing a self-selection mechanism

Reference no: EM1313789

Pelican Point Financial Group's clientele consists of two types of investors. The first type of investor makes transactions in a given year and has a net worth of over $1 million. These investors seek unlimited access to investment consultants and are willing to pay up to $10,000 annually for not fee-based transactions, or alternatively, $25 per trade. The other type of investor also has a net worth of over $1 million but makes few transactions each year and therefore is willing to pay $100 per trade. As the manager of Pelican Point Financial Group, you are unable to determine whether any given individual is a high or low volume transaction investor. Design a self-selection mechanism that permits you to identify each type of investor.

Reference no: EM1313789

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