Suppose employees pay a bond of S1,000 to an employer. The gain from shirking is $400. Monitoring

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Suppose employees pay a bond of S1,000 to an employer. The gain from shirking is $400. Monitoring devices have been installed so that there is a 50% chance of being caught if you are shirking. The company is considering the installation of additional monitoring devices to increase the chance of catching a shirker to 100%. They feel this is needed to deter all shirking. What is your recommendation to the company? Explain.
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Public Finance

ISBN: 978-0078021688

10th edition

Authors: Harvey Rosen, Ted Gayer

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