For low values of aR, such that Ra(1/2, a higher value of k (a lower penalty)
implies a fall in LP/LR. For high values of aR, however, a higher value of
k implies an increase in LP/LR. The intuition for this result is that when aR is
small the manager is already stealing a great deal, soP is already low in absolute
terms and thus further changes in R do not induce much additional theft.3
However, we can obtain an unambiguous prediction for the relative responsiveness,