If firms anticipate that they are at risk of being held up, firms are more likely to adopt contracts or organizational forms such as
a. investments in reputation
b. mergers
c. exchange of hostages
d. All the above
Question 2
Incentive contracts typically result in higher risk-related compensation to agents on average,
a. even so, they are always worth it
b. this does not affect their desirability
c. as a consequence, they may cost more than the problem they solve
d. therefore, they are never worth it
This engraving by William Russell Birch shows Congress Hall (left), which was occupied by Congress f
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Economic objectives of firms