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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