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Llanis Llanis
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7 years ago
A good salesperson can sell $1,000,000 worth of goods, while a poor one can sell only $100,000 worth of goods. Job applicants know if they are good or bad, but the firm does not. A firm will offer job applicants a choice between a fixed salary of $25,000 or 20% commission. Assuming risk-neutral salespersons and the possibility of opportunistic behavior, will this choice of contracts allow the firm to distinguish between good salespersons and bad ones before the hiring decision is made?
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Microeconomics

Microeconomics


Edition: 6th
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LBCeaLBCea
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Llanis Author
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7 years ago
Helped a lot
novae
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Yesterday
Thanks
kamikazekota
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2 hours ago
Brilliant ツ
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