To Induce an Agent to Work Hard,a Principal May Offer

question 36

Multiple Choice

To induce an agent to work hard,a principal may offer the agent a bonus,in other words,an extra payment if a performance target is hit.Suppose that the agent's performance is affected by factors beyond the agent's control,for example umbrellas are demanded more on a rainy day.Under what conditions may the bonus not induce the agent to work harder?

• A) The agent is very risk averse.
• B) The agent is very risk loving.
• C) The agent is risk neutral.
• D) The principal is risk neutral.

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Definitions:

Fixed Ratio

In operant conditioning, a schedule of reinforcement where a response is rewarded after a set number of responses.

Variable Interval

In operant conditioning, a reinforcement schedule where responses are rewarded after unpredictable time intervals.

Pop Quizzes

Surprise tests given without prior warning to students, usually to assess their attentiveness or retention of learned material.

Developmental Perspective

An approach in psychology that studies the changes in human behavior and thought process over the course of a lifetime.