_____ was developed principally by researchers in economics and finance to highlight the fact that individual employees will often act in their own self-interest rather than in the interest of their employer.
A) Strategic choice theory
B) Institutional theory
C) Agency theory
D) Contract theory

Question

Quizplus · Accepted Answer

Agency theory is a commonly used framework in economics and finance that emphasizes the possibility of conflicts of interest between principals (such as company owners/managers) and agents (such as employees). The theory suggests that agents may prioritize their own interests over those of their principals. By understanding these potential conflicts, principals can create incentives and structures that align the interests of both parties. Other options such as strategic choice theory, institutional theory, and contract theory do not emphasize conflicts of interest between principals and agents.

_____ Was Developed Principally by Researchers in Economics and Finance