Principal-Agent Problem / Agency Problem
Updated 2026-08-10
INTRODUCTION
English translation pending.
CORE DEFINITION
The Principal-Agent Problem, formalized in economics from the 1970s through the work of Jensen and Meckling, describes the conflict that arises when a principal delegates to an agent whose objectives differ and whose actions the principal cannot fully observe. Its core proposition is that misaligned incentives plus asymmetric information reliably produce behavior that harms the principal, regardless of the agent's character. The key qualifier is structure over morality: the remedy is incentive design, monitoring, and disclosure, not exhortation.
SCAFFOLDING EFFECT
Reduce cognitive load
- Incentive audit: map the actual interests of each party rather than the stated ones. - Alignment design: shape pay, equity, or contracts so the agent gains when the principal gains. - Information check: add monitoring or disclosure wherever the principal cannot directly observe the work.
Anchor fast decisions
Delegation separates the person who bears the consequences from the person who takes the action. Where the agent's payoff responds to different variables than the principal's, effort flows toward the agent's variables, and where the principal cannot observe the action, the divergence goes undetected. Changing the payoff structure changes behavior more reliably than changing the agent.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- zh.wikipedia.orghttps://zh.wikipedia.org/wiki/%E4%BB%A3%E7%90%86%E5%95%8F%E9%A1%8Cverified
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