Asked by Ahmed Dabour on Jun 04, 2024
Verified
Because incentive contracts result in more risk placed on the part of agents
A) the average level of compensation typically falls
B) the average level of compensation typically rises
C) compensation is unaffected
D) employers want employees to insure against wild compensation swings
Incentive Contracts
Agreements designed to motivate individuals or parties by offering rewards that are directly linked to their performance or achievements.
Risk Placed
A term that might be used to describe the process of assessing and assigning a level of risk to a particular investment or decision.
Average Level
A mean or central value that represents the typical amount, degree, or condition of a set of numbers or measurements.
- Examine the potential dangers of incentive contracts and how they influence both employers and employees.
Verified Answer
Learning Objectives
- Examine the potential dangers of incentive contracts and how they influence both employers and employees.
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