Which of the following is the reason behind the principal agent problem?
A) adverse selection
B) irrationality
C) asymmetric information
D) moral hazard

Name: Which of the following is the reason behind the principal agent problem? A) adverse selection B) irrationality C) asymmetric information D) moral hazard
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Question

Quizplus · Accepted Answer

The principal-agent problem arises primarily due to asymmetric information, where the agent has more information than the principal, leading to potential conflicts of interest.

Which of the Following Is the Reason Behind the Principal