Problem
Suppose that there are two national football leagues: The Time League and The Bonus for Win League. The players have private information about their effort. In The Time League, players receive a fixed wage based on the time they spend practicing and playing matches. In The Bonus for Win League, the players are paid one wage for a loss, a higher wage for a tie, and the highest wage of all for a win. Describe the moral hazard and adverse selection problems in these two leagues. Which league best addresses these problems?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.