What is an efficiency wage

Reference no: EM13902714

1. How can the principal-agent model be used to explain why public enterprises, such as post offices, might pursue goals other than profit maximization?

2. Why are bonus and profit-sharing payment schemes likely to resolve principal-agent problems, whereas a fixed-wage payment will not?

3. What is an efficiency wage? Why is it profitable for the firm to pay it when workers have better information about their productivity than firms do?

Reference no: EM13902714

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