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Control Question 1

Assume that the CEO decides not to force the supervisors to set the minimum transfer of 5.

a) What choice does the supervisor have in selecting the minimum transfer for her/his assigned employee in this case?
No choice
The choice whether or not to set a minimum transfer of 5 points for her/his employee or whether or not to let the employee decide completely freely about her/his transfer.


Suppose a supervisor decides not to set a minimum transfer for his/her employee.

b) The employee assigned to this supervisor decides to transfer 5 points. What income results from this transfer?
Points for the Employee:
Points for the CEO:
Points for the Supervisor:


c) Assume the three other employees transfer 20 points each. What is the total income of the CEO?

Total Income for the CEO:


d) Now suppose the employee assigned to this supervisor decides to transfer 20 points. What income results from this transfer (ignoring the other supervisor-employee pairs)?

Points for the Employee:
Points for the CEO:
Points for the Supervisor:


e) Assume that the total transfer of the other three employees is 80 points. What is the total income of the CEO?

Total Income for the CEO:


Now suppose the supervisor decides to set a minimum transfer of 5 points for his/her employee.

f) What is the minimum number of points her/his employee must transfer?
0 Points
5 Points


Control Question 2

Assume that the CEO decides to force the supervisors to set the minimum transfer of 5 points for their employee.

g) What choice do the supervisors have in setting the minimum transfer in this case?
No choice
The choice whether or not to set a minimum transfer of 5 points for her/his employee or whether or not s/he lets the employee decide completely freely about her/his transfer.


h) The employee assigned to this supervisor decides to transfer 60 points. What income results from this transfer (ignoring the other supervisor-employee pairs)?
Points for the Employee:
Points for the CEO:
Points for the Supervisor:


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