If a Principal and Agent Have an Efficient Contract, Then

question 77

Multiple Choice

If a principal and agent have an efficient contract, then

• A)one of them must be more risk-averse than the other.
• B)neither can be made better off without harming the other.
• C)they must have symmetric information.
• D)the principal bears more of the risk.

---

Definitions:

Alternative Work Arrangement

Employment arrangements that differ from traditional workplace settings or schedules, including remote work, flextime, job sharing, and compressed workweeks.

Work Sharing

A strategy that allows employees to split duties and hours, aimed at reducing layoffs and improving flexibility.

Pending Layoff

A situation where employees are at risk of losing their jobs due to organizational changes, but final decisions have not yet been made.

Contingency Workers

Individuals employed on a temporary or contractual basis, as opposed to permanent, full-time employees, to provide flexibility in workforce management.