In the Gift Exchange Game, an Incentive-Based Contract Is One

Multiple Choice

In the gift exchange game, an incentive-based contract is one where:

A) The principal stipulates a wage for effort but also invests in a monitoring technology that can catch the agent, with some probability, if the latter shirks.
B) The principal stipulates a wage for effort and relies on the worker's reciprocity to fulfil the effort asked for.
C) The principal can perfectly monitor the agent and punish the agent in the event of shirking.
D) The principal and the agent rely on mutual trust and reciprocity in order to achieve an efficient outcome.