The problem of motivating one party to act in the best interest of another party is known as the principal-agent problem.

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The principal-agent problem refers to the challenge of aligning the interests of an agent (such as an employee or a manager) with those of the principal (such as a business owner or shareholder) who hires or delegates authority to the agent. This problem arises because the agent may have different goals, incentives, or information than the principal, which can lead to conflicts of interest or moral hazard. To address this problem, principals may use various mechanisms to monitor, reward, or sanction agents based on their performance and adherence to the principal's objectives.

The Problem of Motivating One Party to Act in the Best