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:

Product Information

Detailed data and specifications about goods or services offered by a company, intended to inform potential buyers and users.

Capability

Refers to the ability or capacity to do something effectively.

Being Believed

The state in which a person's statements or claims are accepted as true by others.

Gestural Computing

Refers to technology interfaces that interpret human gestures as inputs for computer control.