Solve for the number of lines of code

Assignment Help Business Management
Reference no: EM131303312

The owner of an online gaming site has hired a programmer to write code. The resulting profit created for the owner is 9C2. Net profit is 9C2 - pC where pC is being paid to the programmer. The programmer incurs a disutility of C3for writing C lines of code. The programmer chooses how many lines to code.

a) Solve for the number of lines of code that the programmer will write.

b) Solve for how much the owner will pay. How many lines of code are written? What are the payoffs for each?

c) How does the total surplus compare if there was no moral hazard (if total surplus were maximized)?

Now suppose the owner changes the compensation scheme: the programmer gets paid z x C2

The additional pay from writing another line can be as such z (C'+1)2 - z (C')2 = 2zC' + z = z (1+2C')

d) Solve for the number of lines the programmer will now write.

e) Assuming z x C2, solve for the owner's optimal compensation scheme.

f) Why does this compensation scheme perform better?

Reference no: EM131303312

Questions Cloud

What do you feel are the possible negative effects : what do you feel are the possible negative effects of religion? Why do you think that many of the over 900 people who died at Jonestown were willing to commit suicide at the request of their leader? How is this type of cult religion similar to ex..
Show how a price shock affectsthe fed inflation target : Show how a price shock affectsthe Fed inflation target. Show how the Fed can respond to regain its target. Show how technological advances affect the Fed inflation target. Show how the Fed can respond to regain its target.
Compute wal-mart and target''s degree of operating leverage : Using the most recent three years of available data, compute Wal-Mart's and Target's degree of operating leverage. You will have to use the formula, percentage change in pretax income divided by percentage change in revenues. Show your work
Explain what is the decision rule in terms of enpv : Describe and calculate Project A's expected net present value (ENPV) and standard deviation (SD), assuming the discount rate (or risk-free interest rate) to be 8%. What is the decision rule in terms of ENPV?
Solve for the number of lines of code : a) Solve for the number of lines of code that the programmer will write. b) Solve for how much the owner will pay. How many lines of code are written? What are the payoffs for each? c) How does the total surplus compare if there was no moral hazard (..
Historic and contemporary factors : Identify the historic and contemporary factors which have led to a culture of low voter turnout in Texas.
Explain the role of the nervous system : Explain the role of the nervous system.Describe the effect of fear, aggression, or anxiety on the specified behavior.Explain the function of the hormones involved and how they relate to the behavior.Describe the effects of regulatory impairments on t..
During the course of a project things change : During the course of a project things change, e.g. the budget is insufficient, the time table unrealistic, your key technical person leaves the company, an important vendor fails to deliver product on time. explain what to do.
Prepare a monthly operating budget for the dmv : Prepare a monthly operating budget for the DMV for the fiscal year ending August 31. Determine the operating surplus and deficit for each month and for the year as a whole

Reviews

Write a Review

Business Management Questions & Answers

  Characterize the culture of the organization in which you wo

Characterize the culture of the organization in which you work. How does this culture affect the work of middle managers? Have you experienced deliberate interventions by senior management that were intended to refocus, refine or revise the culture o..

  Key contributions of entrepreneurship in the economic growth

Entrepreneursip has become one of the key subject and course in various schools and institutions of studied to day.- what are the key contributions of the entrepreneurship in the economic growth?

  Descriptive statistics and basic properties of variables

Explain five descriptive statistics used to explain the basic properties of variables. Which ones are used in a corporate office setting?

  Challenges in the global business environment

According to the textbook, ongoing challenges in the global business environment are mostly attributed to unethical business practices, failure to embrace technology advancements, and stiff competition among businesses.

  Evaluate the organisational and national cultural issues

Identify and evaluate the organisational and national cultural issues that you may have to deal with on assuming responsibility for the new manufacturing facility.

  One of the obstacles to quick action for a company is

One of the obstacles to quick action for a company is. The biggest deals were concentrated in certain industries. The __________ led the way with 5 out of the top 15 deals in the 1998-2000 period.

  Show changes in healthcarequestion how do we as healthcare

show changes in healthcarequestion how do we as healthcare managers stay abreast of changes that will impact the health

  What functions of management has leadership used

What functions of management has McDonald's leadership used in order to turn around the company and make it profitable?

  Description of negotiations

Description of Negotiations - Explain one of the most difficult negotiations you have experience.

  A letter from a local public school requesting free passes

A letter from a local public school requesting free passes for their charity auction.

  Illustrate what type of lawsuit might panda bring facts

Although customer service has in the past been an important factor in business buyer-seller relationships, its importance has been waning in the last decade.

  Explain contract enforceable against zach

The Zach sold a restaurant to Shane for $150,000. As part of the agreement Zach promised not to open another restaurant business for three years within a 50-mile radius of the one sold.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd