Question
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What happens to the optimal "piece rate" ( i.e ., the fraction of...
What happens to the optimal "piece rate" (i.e., the fraction of output shared with the employee) when the employee's risk aversion decreases (i.e., the employee becomes less risk averse)?
a. The optimal piece rate decreases
b. The optimal piece is not affected
c. The optimal piece rate increases
d. None of the above
Answer & Explanation
Solved by verified expertAnswered by GeneralStrawPelican21 on coursehero.com
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