The Principal Agent Problem & Hayek’s Knowledge problem
The Principal Agent Problem The Principal Agent Problem occurs when one person (the agent) is allowed to make decisions on behalf of another person (the principal). In this situation, there are issues of moral hazard and conflicts of interest. The Principal Agent ProblemHayek’s Knowledge problem Frequently mentioned as the most important essays in the history of economic thought, Hayek’s essay “The Use of Knowledge in Society” question the fundamental problem that economics exists to solve?...