Agency problem: Difference between revisions

Agency problem (view source)

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-[[File:Secret agent problem.png|450px|frameless|center]]{{Subtable|A special agent’s problem, yesterday}}}}The [[agency problem]] describes the intrinsic [[conflict of interest]] any [[agent]] working on a [[commission]] faces, and that is that as long as it gets its [[commission]], it doesn’t really care a hill of beans what its [[principal]] gets, however much it might protest to the contrary.
+{{image|Secret agent problem|png|}}{{Subtable|A special agent’s problem, yesterday}}}}The [[agency problem]] describes the intrinsic [[conflict of interest]] any [[agent]] working on a [[commission]] faces, and that is that as long as it gets its [[commission]], it doesn’t really care a hill of beans what its [[principal]] gets, however much it might protest to the contrary.
 In a sense, this is an articulation of the [[prisoner’s dilemma]], shouldn’t surprise anyone and ''should'' be cured by repeat [[Iterated prisoner’s dilemma|iterations]]: clients have memories and will remember when you ripped them off.