Principal Agent Theory Essay Example - PaperAp.com.
Principal- Agent Theory Is an effective Tool or only a good Hypothesis?
In terms of the principal-agent problem, the client and his or her legal problems represent the principal, whereas the lawyer is the agent. This type of relationship exists in a vast array of.
A principal-agent problem is one where responsibility of some task is delegated from a principal to an agent. Generally principal-agent problems are split into two categories; Moral Hazard problems and Adverse Selection problems. Both types have p.
Imagine this: You are at a poker table with your friend. Your friend is a strong poker player - you've seen him win at various state-side poker tournaments. Due to a propensity for fast cars and partying, he's currently under-bankrolled. He asks y.
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Through the inherent information asymmetry and intangible nature of information a principal-agent problem arises, which should be mastered with the use of a balanced mixture of hierarchical (structures, instructions, control and sanction instruments) and market approaches (internalization of risk costs) with the framework of corporate information security governance.
Principal and agent always want to maximize their own benefits. But the benefit of principal depends on the cost of agent, depends on how hard work the agent does. While the benefit of agent is equal to the cost of principal, Liu and Jiang (2006) (3) discussed it is the conflict filed that exists between two actors’ relationship. Therefore, most of researches propose that there are two ways.