New study reveals unique contracts for risk-averse workers in production.
The article explores how to create fair contracts when both the boss and worker share risks. It shows that a simple contract works well when the worker isn't afraid of risks. But when the worker is risk-averse, a more complex contract is needed. This contract is unique and not as sensitive to performance as expected. Surprisingly, the simple contract doesn't work as well when the worker is less scared of risks.