Describe the principal-agent framework

In standard principal-agent framework an agent may be directed to maximize an objective function which may or may not be different from that of his principal. How can then principal or the government achieves the objective directing an agent delegated with authority, who is maximizing altogether an objective function other than that of the principal? The key insight is that the principal may find it optimal to act strategically when its agents themselves are acting strategically.

 

Posted Date: 9/30/2013 5:50:02 AM | Location : United States

Ask an Expert

Related Discussions:- Describe the principal-agent framework, Assignment Help, Ask Question on Describe the principal-agent framework, Get Answer, Expert's Help, Describe the principal-agent framework Discussions

Write discussion on Describe the principal-agent framework
Your posts are moderated

Write your message here..

Related Questions

Variation of class rights, Variation of class rights: It is only neces... Variation of class rights: It is only necessary to follow the variation of class rights procedure (and a dissenting minority can only apply to the court for cancellation)  if

Some provisions of the factories act, Some provisions of the Factories Act ... Some provisions of the Factories Act and its amendments are given below. 1.   These provisions relate mainly to the health, safety and welfare of the workers in industry. 2.

Case, Corgi was the breeder of prize-winning pedigree dogs that often sold ... Corgi was the breeder of prize-winning pedigree dogs that often sold for very high prices. Reynolds, a wealthy businessman who had recently retired, decided to purchase one of thes

What do you mean by garnishee orders, Q. What do you mean by Garnishee Orde... Q. What do you mean by Garnishee Orders? The ATO has the power to issue garnishee orders which allow recovery of debts from a person's bank account, wage or from people who owe

Legal pyramid, Legal Pyramid: However the sources of England law menti... Legal Pyramid: However the sources of England law mentioned above may be described through the aid of the following diagram or "legal pyramid"; NOTE: there as;

Explain the international law, Explain the International law Internatio... Explain the International law International law is the body which governs State actions and its effective implementation within the States depends on the way in which States tr

Tort law assignment help: causation, The second factor which is necessary f... The second factor which is necessary for a claimant to impose claim on other person is to have a cause for the action taken by him. Hence it is important to have a proper link betw

Issue of restraining order services , Sub: Filing Divorce and Issue of Rest... Sub: Filing Divorce and Issue of Restraining order services Dear Kimberly Frederick Bumfree, Warm Greetings from Donald & Matthews Law firm, This letter is for your imme

Realization of auditors, Realization of Auditors: it is a mere truism ... Realization of Auditors: it is a mere truism to say that the value of loans and securities depends on their realization.  We were told that a statement to that effect, is so u

What are the ways of aggregate demand policy, What are the ways of aggregat... What are the ways of aggregate demand policy To illustrate some of the issues involved in policy coordination we will focus on monetary policy. We discuss three ways in which