Information asymmetries are a major source of agency problems.

Name: Information asymmetries are a major source of agency problems.
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Question

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Information asymmetries occur when one party in a transaction has more or better information than the other party, creating a potential for the party with superior information to exploit the other party. This can result in agency problems, as agents may act in their own interest rather than in the interest of their principal due to the information advantage they possess.

Information Asymmetries Are a Major Source of Agency Problems