Power Asymmetry and the Principal Agent Problem


Lawrence Susskind and Robert Wilkinson

This brief video simulation provides insights into the challenges surrounding principal agent dynamics and power asymmetry in negotiation.


This video simulation was designed to give students insights into the challenges surrounding difficult conversations, both with people across the table, as well as with people on their own side. The scenario also focuses on negotiating with those who are more senior and who may exhibit nonconstructive behavior. The video can be used in variety of courses covering management, leadership, negotiation, communication, and leading diverse organizations. The video is only 15 minutes long and includes a three-minute introduction by Professor Susskind.

The video is separated into three sections, highlighting separate phases of a difficult conversation or negotiation:

  1. preparation and goal alignment,
  2. re-evaluation of mid-course strategy, and
  3. review and coaching.

Check out this brief preview of the video:

The full 15 minute video comes with teaching notes and the full simulation dialogue. The exchange was designed to bring numerous concepts "to life” on the screen, provoke debate, facilitate small group discussion and spark individual reflection.

Key concepts embedded in the dialogue include:

  • Managing the tension between principals and agents (the “principal- agent problem”).
  • Handling Difficult Conversations
  • Coaching as a Managerial Responsibility
  • The “Dealmaking Mindset” vs. the “Implementation Mindset”
  • Dealing with Power Asymmetries
  • Influencing Without Authority
  • The “Fixed Mindset” vs. the “Growth Mindset”

Power Asymmetry and the Principal Agent Problem Attributes

Time Required: 30 minutes - 1 hour
Teaching Notes Available: Yes
Run Time: 15 minutes