Appendix: Incentive-Compatible Revelation Mechanisms Attempt to

question 25

Multiple Choice

Appendix: Incentive-compatible revelation mechanisms attempt to

• A) induce an employee to reject the next best alternative employment opportunity
• B) elicit privately-held information
• C) secure enforcement primarily by third parties
• D) reject voluntary contracting with third parties
• E) impose similar risk premiums on all employees

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Definitions:

Present Value

The present value of a future amount of money or a series of cash inflows, considering a certain rate of return.

Surround Sound Stereo

A system of audio amplification that enhances the depth and quality of sound reproduction by using multiple speakers around the listener.

Interest Rate

An interest rate is the percentage of principal charged by the lender for the use of its money or the rate earned on deposits.

Annual Interest Rate

The percentage of principal earned as interest on an investment or paid on a loan over a one-year period.