A risk-averse manager is hired to run a firm for shareholders. If shareholders cannot observe the manager's effort, which would be the best employment contract?
a. a high-powered incentive contract to elicit maximum effort.
b. a fixed salary.
c. a moderately powered incentive scheme that elicits some effort without exposing the manager to too much risk.
d. an incentive scheme that provides maximum incentives and maximum insurance.
Question 2
A risk-averse manager is hired to run a firm for shareholders. If the manager's effort can be observed and specified in a contract, which would be the best employment contract?
a. a high-powered incentive contract to elicit the most effort.
b. a fixed salary paid as long as the required effort is undertaken.
c. a proportion of profits paid as long as the required effort is undertaken.
d. a wage well in excess of his or her outside opportunity.
These species are all at risk of extinction.
Nursing Interventions According to Stage of Severity for Suicide Risk
Summary of Hale’s Lactation Risk Categories
Stroke Risk Factors
Risk Factors for NSAID-Induced Gastrointestinal Ulcers
Neck stretch. Rest the receiver’s head on the palm of your right hand, taking a firm hold on the ...