What Is the Dark Side of Principal-Agent Relationships

question 99

Multiple Choice

What is the dark side of principal-agent relationships?

• A)Agents are often not rational.
• B)Institutions sometimes force principal-agent relationships underground.
• C)Principals often force agents to do things against their will.
• D)The interests of the agent and the principal may not be well aligned.
• E)The principals usually do not know what they are doing.

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Definitions:

Profit-Maximizing

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Profit-Maximizing Quantity

The production level where a company reaches its maximum profitability.

Consensus

is a group decision-making process where discussions continue until all members agree on a particular solution or decision, highlighting collaboration and collective agreement.

Team Skill

The collective abilities and competencies of a group that contribute to its effectiveness in achieving common goals.