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.

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Definitions:

Lewin's Approach

A psychological methodology developed by Kurt Lewin, emphasizing the dynamics of group behavior and change through the force field analysis concept.

Behavior Shift

A change in actions or reactions of an individual or group in response to external stimuli or internal motivations.

New Level

Refers to a stage or phase that represents an advancement or a progression beyond the current state.

Unfreezing

The initial stage in the process of change, where existing patterns or behaviors are questioned or destabilized to prepare for transformation.