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