The recent Enron and Tyco International scandals are an example of

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The Enron and Tyco International scandals are classic examples of the principal-agent problem, where managers act in their own self-interest rather than in the best interest of the shareholders or owners they are supposed to represent. In both cases, executives engaged in fraudulent accounting practices to hide losses and inflate earnings, resulting in significant financial losses for investors. The free-rider problem, adverse selection problem, and lemons problem are different types of market failures that arise due to information asymmetry, but they do not apply specifically to these scandals.

The Recent Enron and Tyco International Scandals Are an Example