Which of the following is true of opportunism?
A)Opportunism increases the possibility that a party can gain by disregarding the contract.
B)Opportunism lowers the cost of negotiation between parties when the contract is incomplete or unclear.
C)Opportunism allows parties to maximize the value of their transactions.
D)Opportunism leads to mutually beneficial outcomes.

Question

Quizplus · Accepted Answer

Opportunism refers to the act of taking advantage of another party and disregarding the terms of an agreement in order to benefit oneself. It increases the likelihood that a party can gain by not abiding by the contract they have agreed upon, which can lead to negative outcomes for the other party.

Answer: C 
 Opportunism can allow a party to maximize the value of their transaction by taking advantage of the other party, but this comes at the expense of the other party. Therefore, it is not a mutually beneficial outcome.

B and D are incorrect because opportunism does not lower the cost of negotiation and it does not lead to mutually beneficial outcomes.

Which of the Following Is True of Opportunism