Principal-agent Problem
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Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online.In political science and economics, the principal agent problem or agency dilemma treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent, such as the problem that the two may not have the same interests, while the principal is, presumably, hiring the agent to pursue he interests of the former. Various mechanisms may be used to try to align the interests of the agent in solidarity with those of the pr...
Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online.In political science and economics, the principal agent problem or agency dilemma treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent, such as the problem that the two may not have the same interests, while the principal is, presumably, hiring the agent to pursue he interests of the former. Various mechanisms may be used to try to align the interests of the agent in solidarity with those of the principal, such as piece rates/commissions, profit sharing, efficiency wages, performance measurement (including financial statements), the agent posting a bond, or fear of firing.
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