Incentives are not likely to be a problem if:
A)workers' efforts are not contractible.
B)only some actions are observable.
C)all actions are observable.
D)actions are not observable.

Question

Quizplus · Accepted Answer

All actions being observable means that it is easier to monitor and incentivize workers to perform their duties effectively. This makes incentives less likely to be a problem. If actions are not observable, the employer may not be able to determine whether the worker is fulfilling their obligations, and therefore incentives may not be effective. Similarly, if only some actions are observable, the employer may not be able to see the full extent of the worker's contributions, which can make it difficult to incentivize effectively. If workers' efforts are not contractible, it means that the worker's contributions cannot be easily and accurately measured, making incentives more difficult to implement effectively.

Incentives Are Not Likely to Be a Problem If