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What is meant by a principal-agent problem

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Reference no: EM131768657

Explain, giving a relevant example, what is meant by a principal-agent problem. Be sure to address each of the following:

 

  • What is a principal? What is an agent?
  • In your example, who is the principal? Who is the agent?
  • What is the problem that arises in your scenario? Is it a problem of information or of action?
  • Propose a solution to your problem. Do you think your solution is practical?

Reference no: EM131768657

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