An agreement in which the incentives of both parties match their goals as closely as possible is:
A) an X-inefficiency contract.
B) a public good.
C) an incentive-compatible contract.
D) a corporate takeover contract.

Question

Quizplus · Accepted Answer

An incentive-compatible contract is designed to align the incentives of both parties involved, ensuring that their goals are closely matched and that each party is motivated to act in accordance with the agreement's objectives.

An Agreement in Which the Incentives of Both Parties Match