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To Induce an Agent to Work Hard,a Principal May Offer

question 36

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To induce an agent to work hard,a principal may offer the agent a bonus,in other words,an extra payment if a performance target is hit.Suppose that the agent's performance is affected by factors beyond the agent's control,for example umbrellas are demanded more on a rainy day.Under what conditions may the bonus not induce the agent to work harder?


Definitions:

Fight-Or-Flight

A physiological response to perceived harmful events, attacks, or threats to survival, instigating an automatic response in the nervous system to either confront the threat or escape.

Kipling Williams

A researcher known for their work in the fields of psychology, particularly in studying social ostracism and group dynamics.

Sociometer Model

A psychological theory suggesting that self-esteem is a measure of how well individuals perceive they are viewed by others in their social group.

Self-esteem

The perception and evaluation of one's own worth or value.

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