Under Which One of the Following Contracts Does an Agent

question 17

Multiple Choice

Under which one of the following contracts does an agent have the least incentive to behave opportunistically?

• A) The agent pays a fixed fee to the principal for the right to all future payoffs.
• B) The agent works for the principal on an hourly basis.
• C) The agent receives a share of the profit.
• D) The agent works for the principal on a per unit basis.

---

Definitions:

Equally Rewarded

A principle where individuals or groups receive similar recognition or compensation for their efforts or contributions.

Work Process

The defined sequence of operations or activities aimed at achieving a specific goal or producing a specific output.

Value for Customer

The perceived benefit or satisfaction a customer receives from using a product or service, compared to the cost of acquiring it.

Related Tasks

A set of tasks that are linked or connected due to their similarities, objectives, or because they contribute towards a common goal.