Consider the two statements:
I. The closer "what you pay for" is to "what you want," then the more you can rely on strong incentives.
II. If you can't bridge the gap between "what you pay for" and "what you want" then strong incentive schemes can be better than weak incentive schemes.
A) I is true; II is false
B) I is false; II is true
C) I and II are both true.
D) I and II are both false.

Question

Quizplus · Accepted Answer

Statement I is true because when "what you pay for" aligns closely with "what you want," strong incentives are effective. Statement II is false because if there is a gap between "what you pay for" and "what you want," strong incentives might lead to unintended consequences or misaligned efforts.

Consider the Two Statements