Examlex
The arrow marked 5 in the accompanying figure is pointing to the ____.
Moral Hazard
The risk that one party to an agreement can change their behavior to the detriment of another after the transaction has taken place, often due to asymmetrical information.
Bonded
indicates a state of being secured by a bond, involving a financial guarantee or protection against losses.
Shirking
The act of avoiding or neglecting responsibilities, especially in the workplace, leading to reduced productivity or performance.
Incentive Contracts
Contracts that provide rewards for performance above a certain standard, encouraging higher levels of effort or achievement.
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