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Agency Theory
(redirected from Principal-agent problem)

    Also found in: Wikipedia 0.03 sec.
Agency Theory
A theory concerning the relationship between a principal (shareholder) and an agent of the principal (company's managers).

Notes:
Agency theory is a very academic term. Essentially it involves the costs of resolving conflicts between the principals and agents and aligning interests of the two groups.

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


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