It is not uncommon for businesses to pay contingent bonuses that depend on performance. Contingent bonuses are an example of what the text calls:
A) X-inefficiency.
B) an incentive-compatible contract.
C) a winner-take-all contract.
D) a network externality.

Question

Quizplus · Accepted Answer

Contingent bonuses align the interests of employees with those of the company, motivating employees to perform better, which is characteristic of an incentive-compatible contract.

It Is Not Uncommon for Businesses to Pay Contingent Bonuses