When One Party to a Transaction Has Incentives to Engage

question 23

Multiple Choice

When one party to a transaction has incentives to engage in activities detrimental to the other party,there exists a problem of

• A)moral hazard.
• B)split incentives.
• C)ex ante shirking.
• D)pre-contractual opportunism.

---

Definitions:

Performance Review

A formal assessment of an employee's work performance, typically conducted on a regular basis.

Employment Discrimination

Unfair or unfavorable treatment of employees or job applicants based on race, color, religion, sex, national origin, age, disability, or any other characteristic protected by law.

Reinstatement

The process of restoring someone or something to their former position, status, or condition, often used in contexts such as employment or insurance policies.

Civil Rights Act

A significant law in the United States that prohibits discrimination on the basis of race, color, religion, gender, or national origin.