Working in the Firms Best Interest – ½ Page
1. Each year, public schools are rewarded with bigger budgets for achieving a rating of “excellent” or “recommended” and are punished for rating “needs improvement.” These ratings are based on meeting thresholds on a broad set of measures such as attendance rates, graduation rates, standardized test scores, SAT scores, and so on.
• Discuss the incentives for school principals (who are the agents, in this case) under this scheme and how you might improve them.
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