______ can provide incentives to honor implicit contracts.
A)Value maximization
B)Adverse selection
C)Reputational concerns
D)Bargaining power

Question

Quizplus · Accepted Answer

Reputational concerns can provide incentives to honor implicit contracts. When a party has a good reputation, they are more likely to honor their commitments as failing to do so could damage their reputation and future business opportunities. This is particularly important in industries where repeated interactions and relationships are valued, such as in banking or legal services. Value maximization, adverse selection, and bargaining power do not necessarily provide incentives to honor implicit contracts.

______ Can Provide Incentives to Honor Implicit Contracts