Multiple Choice
Which of the following statements about outcome-oriented or behavior-oriented contracts is true?
A) Merit pay is an example of an outcome-based contract.
B) Behavior-oriented contracts do not transfer risk to the agent.
C) Outcome-oriented contracts do not require a compensating wage differential.
D) Outcome-oriented contracts decrease the agent's risks.
E) In behavior-based contracts,information asymmetry is not an important issue.
Correct Answer:
Verified
Correct Answer:
Verified
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