Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

تمرين 24

Suppose the manager offered the worker an incentive scheme with b = 75, so its power is between the two schemes in the numerical example.
1. What effort level would this scheme induce from the worker?
2. Assume the worker can earn 300 (net of effort costs) in his best alternative job. What level of fixed payment a can the manager offer to make sure the worker accepts the contract?