Agency theory

(redirected from Agent Theory)

Agency theory

The analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal.

Agency Theory

The study of the relationship between an agent (such as a broker) and a principal (such as a client). Agency theory seeks to explain the relationship in order to recommend the appropriate incentives for both parties to behave the same way, or more specifically, for the agent to have the incentive to follow the principal's direction. Agency theory also seeks to reduce costs in disagreements between the two.
References in periodicals archive ?
The studies are conducted under the theoretical framework of Principal Agent Theory.
Three interrelated areas are examined in detail: the merits of principal agent theory in explaining China's enterprise reform, the concept of private property rights and the nature of TVEs.
54) There was no test for whether or not the principal agent theory was applicable.
A brief part 3 addresses issues of ethical pluralism, laying out the contours of an ideal agent theory and principles.
One approach that has been proposed is to apply principle agent theory in a form that produces incentive compatibility, when the decision is delegated by the owners to a professional manager.