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

Exercise 28

Many contracts between professional athlete sand the teams on which they play involve incentive provisions. Can you provide some examples? Do you think moral hazard is a serious problem for professional athletes? Why or why not? Discuss the problem of using incentive contracts for unproven rookies, whose playing time may depend on the discretion of the coach. How might incentive contracts worsen the problem with performance-enhancing drugs such asteroids?