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(Solved) (Latest ver. Aug 2020) - Monitoring Dealer Actions in Casinos

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Suppose that in Las Vegas, casinos could monitor the actions of dealers costlessly and spot every instance in which the dealer makes a mistake in which a player is overpaid. The casino is considering disciplining its dealers by charging them the equivalent of the money lost by the casino for any mistakes that they (the dealer) might make. Other than these penalties, the dealers would be paid a straight salary per hour worked.

Does the use of this penalty make economic sense? Why?

 







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This question was answered on: Sep 16, 2020

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