The principal–agent problem and its mitigation: a critical historical analysis

What is it about?

Based on the critical historical analysis of extensive historical data, this study informs the social construction of solutions to the principal-agent problem in non-Western marketplaces. Many contemporary strategies related to synergistic relationship building, formal and informal institutional constraints or motivations, and economic measures to minimize agents’ dishonest acts, have historical parallels. Conventional principal-agent and stewardship theories are extended to examine agents’ dishonest acts, principals behaving dishonestly toward agents, and agents and principals colluding to behave dishonestly at a third party’s expense.

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