Many art galleries keep 60 of the sale price of a painting. However, art galleries do not typically pay the artist while the painting hangs on the wall. This form of contingency contract may be efficient if
A) the artist is less risk averse than the gallery.
B) the gallery is less risk averse than the artist.
C) the artist is unable to diversify across galleries or paintings.
D) the gallery is unable to diversify across artists of paintings.
Question 2
Assume a lawyer signs a contingency fee contract with a plaintiff. The case ends up settling for 1 million, of which the plaintiff received 800,000. It is obvious this contract was efficient.
A) True, the plaintiff received some money.
B) False, it is not clear whether another lawyer would have settled for more.
C) False, it is not clear whether the plaintiff's lawyer is very smart.
D) True, the plaintiff and lawyer reached an agreement and both lived up to their end of the agreement.
Anamorphic street painting
Cave painting from Lascaux
All of the homes in this new neighborhood of Brentwood, California, are for sale, evidence of the co
Bodhisattva, detail of a fresco wall painting in Cave I, Ajanta, Maharashtra, India.
(a) Chromosome painting with five different-colored markers in a normal cell. (b) Painting produces