Suppose you have hired a new worker, unfortunately you do not know if the worker is a shirker or a hard worker. Suppose working hard raises the probability of making a sale from 40% to 80% (thus raises the probability of making a commission C by the same percentage). If the cost of working harder is $150,what commission C should you offer the worker to provide an incentive to work hard.© BrainMass Inc. brainmass.com September 21, 2018, 11:21 pm ad1c9bdddf - https://brainmass.com/economics/cost-benefit-analysis/expected-payoff-of-shirker-or-a-hard-worker-582099
Solution calculates the minimum commission to provide an incentive for hard work through expected payoff to a new employee. 40 words.