What kind of a payment provision should a contract governing a principal/agent relationship contain?
Contracts that govern a principal/agent relationship must contain payment provisions that induce the agent to make efforts that the principal wants made on his behalf, given that he cannot monitor the agent and that random events can affect the results the agent produces.
You might also like to view...
Refer to the scenario above. If the players have to pay a fairness penalty of $7,000, ________
A) this game will no longer have a Nash equilibrium B) this game will have two Nash equilibria C) Nash equilibrium will occur when Mathew chooses bad and Peter chooses good D) Nash equilibrium will occur when Mathew chooses good and Peter chooses bad
Suppose a new Concordia University graduate will have an annual nominal income of $35,000 for the first year she works. If the annual inflation rate is 10 percent, what salary would she need in the second year to maintain the same real income?
a. $35,000 b. $40,000 c. 31,500 d. 38,500