Why Is the Principal-Agent Problem Less Likely When Getting a Haircut

question 112

Multiple Choice

Why is the principal-agent problem less likely when getting a haircut than when getting a car repaired?

• A)Haircuts are less expensive than car repairs.
• B)There are no hidden actions when getting your hair cut.
• C)There are no hidden actions when getting your car repaired.
• D)Auto mechanics are less honest than hair stylists.
• E)There is no principal-agent relationship in car repair.

Comprehend the concept and implications of postpurchase cognitive dissonance.

Identify the sources of information used by consumers and their impact on the decision-making process.

Understand the steps of the consumer decision process model.

Understand the concept of aligning actions and their role in social interactions.

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Definitions:

Different Departments

Distinct organizational units within a company, each specialized in specific functions or tasks.

Opportunity

A set of circumstances that makes it possible to do something or for something to happen.

Ability

The possession of the means or skill to do something effectively and efficiently.

Negotiators

Individuals or parties involved in discussions aimed at reaching an agreement or resolving a dispute through dialogue and compromise.