Under which of the following circumstances is the principal-agent problem likely to be most serious.

Question

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The principal-agent problem is likely to be most serious between surgeons and patients because surgeons have a higher degree of autonomy and decision-making power than general practitioners or nurses, which can lead to a greater potential for conflicts of interest or moral hazard. Furthermore, surgical procedures often involve greater risks and higher costs, which can increase the stakes of the relationship and exacerbate the information asymmetries between the parties.

Under Which of the Following Circumstances Is the Principal-Agent Problem