Explain how the optimal incentives contract would differ if the less risk-averse bank officer (Dashing in Figure)
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Explain how the optimal incentives contract would differ if the less risk-averse bank officer (Dashing in Figure) had generated the smaller expected profit (i.e., the lower hill-shapedcurve).
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Sorting Managers with Linear Share Contracts More risk averse 96 Eess riSk averse 亡 55 48 Venture capital personal banker Commercial onstruiction loan office ±0.1% :S12(000) 0 0.3% ±0.2% ±$24(000) 0.4% Profit-sharing rate
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Related Book For
Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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