Managerial reputation is an _____ incentive that helps to mitigate the _______ principal-agent problem.

Question

Quizplus · Accepted Answer

Managerial reputation is an external incentive because it involves the reputation of the manager in the broader market, rather than just within the firm. It helps to mitigate the owner-manager principal-agent problem by encouraging the manager to act in the best interests of the owner in order to maintain a good reputation in the market.

Managerial Reputation Is an _____ Incentive That Helps to Mitigate