principal agent theory

Three ways in which agents may differ from their principals. First, the agents may have different preferences from their principal, such as willingness to work. Second, agents may have different incentives from the principal. Agents may have a different stake in the outcome or may receive different rewards than the principal. Third, agents may have information that is unavailable to the principal, or vice versa. These types of divergences may give rise to problems relating to monitoring, incentives, coordination, and strategy. (Michael L. Moffitt and Robert C. Bordone, eds., Handbook of Dispute Resolution [Program on Negotiation/Jossey-Bass, 2005], 190). See Also: Do You Need a Broker?.


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The following items are tagged principal agent theory.

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What Does Conflict Management Mean in Business Negotiations with Competitors?

Posted by & filed under Conflict Resolution.

They say it pays to keep your friends close and your enemies closer, but in business negotiation, keeping your enemies—or competitors—close could end you up in court, as Apple’s recent encounter with the U.S. Department of Justice suggests. The story begins back in 2007 when, unhappy with Amazon’s low, flat price of $9.99 for e-books, five … Read More 

Do You Need a Broker?

Posted by & filed under Conflict Resolution.

According to conventional wisdom, you should always hire a real estate agent when you’re trying to buy a house. The broker’s market expertise will help you decide what moves to make and what price to pay. Because the seller usually has his own broker, the motto “fight fire with fire” applies as well. Perhaps most … Read More