[n this question. we'll consider a version of the authority model where the principal works with two agents. each on a separate project. There is one principal who is in charge of two projects, I' : 1, 2. The principal hires one agent for each project; we identify the agent associated with project i as Agent i. Each Agent i separately chooses effort e; to produce an idea for his own project 1'. Each Agent is e'ort cost is #3. At the same time. the Principal P chooses effort levels .El and .E2 to devote to each project. Her total effort cost is %(El + I31)". The probability that Agent 1' produces an idea for Project 1' equals his e'ort 5. The probability that P produces an idea for Project 1' equals E. For Project 1: tithe Principal's idea is implemented. then the Principal and Agent 1 both receive 1. [ngent 1's idea is implemented. then the principal receives 0 4. a1