Which of the following factors would support the use of a behaviour-based contract between principals and agents?
A)A tradition of using outcome-oriented contracts
B)R&D-oriented jobs
C)Outcome uncertainty
D)Employer has the ability to pay

Question

Quizplus · Accepted Answer

Behaviour-based contracts are useful in situations where there is outcome uncertainty. This type of contract aligns the agent's incentives with those of the principal, which can lead to improved performance when outcomes are uncertain. The other factors listed do not necessarily support the use of behaviour-based contracts.

Which of the Following Factors Would Support the Use of a Behaviour-Based