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Warranty clauses, which are designed by the agent to be a signal of commitment, end up becoming an area for moral hazard.
We discuss why government clients become risk averse as a starting basis for understanding Technology One’s preferred contractual arrangements. It is suggested that an incentive-based contract would be more likely to produce an innovative solution for the principal and would more closely align the motivations of the two parties. Alternatively, the use of a performance surety bond may alleviate the risk for the vendor, but only serves to increase the average bid price for the principal...
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Common topics in this essay:
- Economic Theory Suggests That Markets Are Efficient And Security Prices Are Determined On The Basis Of Fundamental Value
- Economic Theory Suggests that Markets are Efficient and Security Prices are Determined on the Basis of Fundamental Value
- Managers, Markets and Prices
- Motivations for Managers
- Oil prices & financial markets
- What Do Managers Do? Critically discuss the following statement: “The work and skills of managers are the same irrespective of their position within the organisation.”
- Arrangement in Black and White
- arrangement in black and white
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- The agent and the principal
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- My understanding on why Christianity stands strongly against Homosexuality
- share prices and markets
- Tax Incidence in a Principal-Agent Framework
- To What Extent Can It Be Said That Outsiders Are Characterised By Alienation And/Or Anomie?
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