In a Principal-Agent Problem,if the Contract Implies That the More

question 97

Multiple Choice

In a principal-agent problem,if the contract implies that the more risk-averse agent will bear less risk,we can say that this contract exhibits

• A) efficiency in risk-bearing.
• B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk.
• C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent.
• D) risk sharing is not optimal because risk-neutral agents should face no risk.

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Definitions:

Recipe Contest

A promotional activity or event where participants submit their original recipes for a chance to win prizes.

In-Store Demonstrations

Promotional events held within retail locations where products are showcased and demonstrated to potential customers.

Bundle Pricing

A marketing strategy where multiple products or services are packaged together and sold at a single price, often at a discount compared to buying each item separately.

Recipe Contest

A competition where participants prepare and present dishes for evaluation by judges according to specified guidelines.