Consider an apple orchard owner deciding how to incentivize his fruit pickers.He pays per pound harvested but adjusts the compensation rate higher during poor harvest seasons.As a consequence

A) The picker's effort would not depend on the compensation rate
B) The pickers would claim poor harvests in order to be paid higher piece rates even during bountiful harvest seasons
C) The pickers would claim good harvests in order to be paid higher piece rates even during poor harvest seasons
D) None of the above

Question

​Consider an apple orchard owner deciding how to incentivize his fruit pickers.He pays per pound harvested but adjusts the compensation rate higher during poor harvest seasons.As a consequenceA) ​The picker's effort would not depend on the compensation rateB) The pickers would claim poor harvests in order to be paid higher piece rates even during bountiful harvest seasonsC) The pickers would claim good harvests in order to be paid higher piece rates even during poor harvest seasonsD) ​None of the above

aseye christabel · Accepted Answer

Final Answer : B, Explanation :  The pickers might be incentivized to claim poor harvests to benefit from the higher compensation rates, even when the harvest is actually bountiful. This is because the compensation rate increases during poor harvest seasons, creating a potential incentive to misrepresent the harvest's quality.

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