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BU.450.750.K1.SP25 Quiz- Requires Respondus LockDown Browser
Single choice
One should worry about the problem of moral hazard when
Options
A.differentiating with a rival firm.
B.solving the game of Prisoner’s Dilemma.
C.designing salesforce compensation.
D.designing a screening mechanism.
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Question: One should worry about the problem of moral hazard when
Option 1: 'differentiating with a rival firm.' Differentiation strategies with rivals are about competitive positioning and market gaps, not primarily about the incentives and risk-sharing that create moral hazard within a principal–agent relationship. This choice targets competition analysis rather than internal incentives that lead to hidden action problems.
Option 2: 'solving the game ......Login to view full explanationLog in for full answers
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