Suppose that a fashion clothing firm in France organizes its salesforce in three teams: the Eyeon-

Competition team, the Tick-Tock team, and the Bonus-for-Excellence team. The teams are of equal quality, but the salespeople are paid differently.

Salespeople in the Eye-on-Competition team are paid an amount that depends on the sales made by them minus the sales made by competing firms. Salespeople in the Tick-Tock team are paid by the hour for time spent in sales activities. Salespeople in the Bonus-for-

Excellence team are paid one wage if they make no sales, a higher wage for regular sales, and the highest wage of all for excellent sales.

a. Describe the predicted differences in the quality of the sales made by each of the teams.

b. Which team is the most attractive to salespeople?

c. Which team will generate the largest profits?