Question: QUESTION 23 15 points Consider the traction between the CEO of a company and it's shareholders. Once the CEO has been hired, their actions affect

QUESTION 23 15 points Consider the traction between the CEO of a company and it's shareholders. Once the CEO has been hired, their actions affect the company's profits and therefore the value of the company to the Shareholders. The effort level of the CEO affects profitability and is hidden to the shareholders. However, the value of the company's output, a depends also upon some random cement. Theodor out being or low given low effort from the CEO (e- or high effort from the CEO (10) are in the table below 0 en 10 Probability (q=0) Probability (400) 0.5 0.5 0.1 0.9 Given this information, write an expression for the centre Compatibility Constraint and an expression for the Participation Constraint that would love to hold a contract is written to solve this problem moral unard. Provide an intuitive expuration of Wutach of these constraints ensures and why they are necessary For the toob press ALTF10 PCI O ALTFF 10 Mac B TV5 Paragraph Arial iii > A 2 L XQ5E *** QUESTION 23 15 points Consider the traction between the CEO of a company and it's shareholders. Once the CEO has been hired, their actions affect the company's profits and therefore the value of the company to the Shareholders. The effort level of the CEO affects profitability and is hidden to the shareholders. However, the value of the company's output, a depends also upon some random cement. Theodor out being or low given low effort from the CEO (e- or high effort from the CEO (10) are in the table below 0 en 10 Probability (q=0) Probability (400) 0.5 0.5 0.1 0.9 Given this information, write an expression for the centre Compatibility Constraint and an expression for the Participation Constraint that would love to hold a contract is written to solve this problem moral unard. Provide an intuitive expuration of Wutach of these constraints ensures and why they are necessary For the toob press ALTF10 PCI O ALTFF 10 Mac B TV5 Paragraph Arial iii > A 2 L XQ5E ***

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