The principal-agent problem occurs:
A. when the principal has less information than the agent.
B. when the principal has more information than the agent.
C. when the agent has less information than the principal.
D. not observed in reality.
A. when the principal has less information than the agent.
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Instituting a rent control program will most likely lead to
A) a shortage of rental units. B) overly elaborate and expensive construction. C) an efficient allocation of existing units among consumers. D) an excess quantity supplied of rental units.
When decision rights are decentralized, typically
a. decisions are being moved to those with less of the relevant information b. decisions are being moved from those with stronger incentives to make good decisions c. decisions are being moved from those with more of the relevant information d. decisions are being moved from those with weaker incentives to make good decisions