In most corporations the salaries of executives are set by a group from the corporation's board of directors. Since ...

heidiz on June 23, 2019

Please Explain

Could someone please explain this answer?

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masonolinde on September 5, 2019

Could we get a full explanation of this one please?

Emil-Kunkin on October 5 at 02:28PM

In the passage, the practice is attacked since even though the individuals are not directly interested in the outcome, they may choose a suboptimal amount because doing so benefits a class of which they are members.

This is the same we see in a. Doctors have incentive to minimize awards since it will benefit them if other doctors do so.