When a Supervisor Withholds Aversive Outcomes So Long as Her

question 123

Multiple Choice

When a supervisor withholds aversive outcomes so long as her subordinates behave as they should,she is using

• A) avoidance.
• B) extinction.
• C) positive reinforcement.
• D) punishment.
• E) retribution.

---

Definitions:

Moral-Hazard Problem

A situation where one party engages in risky behavior knowing that it is protected against the consequences, often because another party bears the cost of those actions.

Moral-Hazard Problem

The moral-hazard problem arises in situations where one party's willingness to take risks is increased because the negative consequences of those risks will be borne by another party.

Principal-Agent Problem

A dilemma in economics where one party (agent) is supposed to act in the best interest of another (principal) but may have a tendency to act in their own interest.

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to the other.