How does the concept of a risk premium in incentive, Managerial Economics

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How does the concept of a risk premium in incentive

1. How does the concept of a risk premium in incentive compensation relate to the concept of a compensating differential in compensation policy?

2. Consider two successful sales companies. One company pays its salespeople a high commission, whereas the other pays its salespeople a straight salary. Assume that both companies are paying their salespeople in an optimal manner. Explain potential differences in the firms that might help to explain the difference in pay policy.

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Managerial Economics: How does the concept of a risk premium in incentive

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Managerial Economics: How does the concept of a risk premium in incentive

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