One argument against using a profit-sharing scheme is the potential for free-riding. In this situation, free-riding refers to
A) one firm using the same contract specifications as another firm.
B) a worker not providing effort because his contribution to profit is very small.
C) a worker not providing effort because he does not want his coworkers' wages to increase.
D) the firm not honestly reporting its profits.
E) profits being insensitive to worker effort because all increases in profit are returned to the workers due to the profit-sharing scheme.
Correct Answer:
Verified
Q1: One disadvantage of using a tournament is
Q3: Which one of the following statements best
Q4: Piece rates typically
A) encourage greater effort from
Q5: If designed correctly, tournaments
A) discourage competition.
B) reward
Q6: Empirically, the relationship between CEO performance (measured
Q7: When considering the running of a corporation,
Q8: Which of the following is a possible
Q9: What happens to the piece rate if
Q10: Which of the following is not likely
Q11: A firm owner wants a manager to
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents