After attending medical school,Georgiana has decided to encourage all of her family members to see her for their healthcare needs because she knows their health problems and has an incentive to keep them alive and as healthy as possible.What type of asymmetric information problem is Georgiana trying to correct by having her family members see her for care?

Question

Quizplus · Accepted Answer

The principal-agent problem arises when there is a conflict of interest between a principal (in this case, the family members as patients) and an agent (Georgiana, as the healthcare provider), where the agent has more information than the principal. Georgiana aims to mitigate this issue by leveraging her intimate knowledge of her family's health problems, aligning her interests (keeping them healthy) with theirs.

After Attending Medical School,Georgiana Has Decided to Encourage All of Her