One assumption of agency theory is that the principals have more information about the resources that are being managed than the agents do.

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One of the assumptions of agency theory is that the agents have more information about the resources that are being managed than the principals do. This information asymmetry can create a situation where the agents may act in their own interests rather than in the interests of the principals. Therefore, agency theory focuses on the design of contracts and incentives that align the interests of agents with those of principals.

One Assumption of Agency Theory Is That the Principals Have