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

masonolinde September 5, 2019

Could we get a full explanation of this one please?

Emil-Kunkin October 5, 2024

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.