In the principal-agent model, the manager is modeled as having all of the following elements except:

Question

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In the principal-agent model, outcomes of actions are typically considered a result of the agent's efforts and the environment, not an inherent element of the manager (principal). The focus is on how the principal motivates the agent (who provides effort) to act in the principal's best interest, considering the agent's risk aversion and decision-making processes.

In the Principal-Agent Model, the Manager Is Modeled as Having