The car rental industry illustrates residual-claimant logic: local branch managers can be among the highest-paid people in the chain because their bonuses are tightly tied to local office success, giving them strong incentives to monitor costs and prevent theft that a salaried employee would lack.

factualpending

Speaker

Russ Roberts

Evidence Quote

the local manager has this enormous incentive that local managers bonus is very tied to success of the of the local office

Source

Michael Munger on Franchising, Vertical Integration, and the Auto Industry 06/22/2009EconTalk
Created: 6/17/2026, 10:31:26 AM

My Notes

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