When Sam Makes an Agreement and Then Behaves After the Agreement

question 21

Multiple Choice

When Sam makes an agreement and then behaves after the agreement in a way to increase his benefits and harm then other party to the agreement,Sam is illustrating

• A) moral hazard.
• B) adverse selection.
• C) signaling.
• D) the cost of contracting.
• E) a pooling equilibrium.

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Definitions:

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Participation that is fully engaged and contributory towards a project or activity.

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Individual investors who are passionate about a startup's industry or mission and invest their personal funds and sometimes expertise, in the early stages of the company's growth.

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