In a forcing-contract scheme, if you work hard and exert high level of effort and either one person in your group shirks or you get a bad random draw (bad luck), the result can have
A) negative payoff
B) zero payoff
C) Neither answer is correct

Question

Quizplus · Accepted Answer

In a forcing-contract scheme, if one person in the group shirks or if you get a bad random draw, it can result in a negative payoff. This is because the scheme relies on everyone in the group putting in effort, and if one person shirks, it affects the performance of the entire group. Additionally, if you get a bad random draw, it may be difficult to meet the goals of the scheme, leading to a negative payoff.

In a Forcing-Contract Scheme, If You Work Hard and Exert