Principal-Agent Problem: Managers vs. Owners and Overproduction in the Presense of Risk

As individuals and collectively people engage in principal-agent relationships where one person is delegated the task of performing in the interest of another person or company.  Economist have done a great deal of scholarly work in the area of incentive design to understand what are some of the problems that can arise when agents are … More Principal-Agent Problem: Managers vs. Owners and Overproduction in the Presense of Risk

Firm Short-Run Output Decisions Under Different Taxation Schemes: An Application of Multivariable Calculus

When firms are deciding in the short-run on how much output to produce in a given period they implicitly or explicitly equate marginal cost to marginal benefits.  In the short-run different types of taxation schemes can change the optimum production levels while other forms of taxation do not change the output decisions of firms.  In … More Firm Short-Run Output Decisions Under Different Taxation Schemes: An Application of Multivariable Calculus