Author Question: If player R moves first in the game in Scenario 13.14, the equilibrium will A) not be different ... (Read 78 times)

savannahhooper · **on:** Jul 1, 2018

If player R moves first in the game in Scenario 13.14, the equilibrium will

A) not be different from what it is in the simultaneous-move scenario.
B) be to R's detriment because it will not be able to react to C's choice.
C) be one in which R chooses 50 and C chooses 150.
D) be one in which R chooses 100 and C chooses 50.
E) be one in which R chooses 150 and C chooses 50.

Question 2

What do we mean when we state that a particular principal-agent payment scheme is inefficient?

A) The principal and agent could find another agreement that would increase the sum of the owner's revenue and the worker's payment.
B) The agreement involves the highest level of effort for the worker.
C) The agreement leads to the lowest level of revenue for the owner.
D) The sum of the income taxes paid by the owner and the worker is too high.