Do you support the idea of the government stepping in to help companies in trouble? Could this promote the moral hazard problem? Fully explain and support your response.
Agency Theory Moral Hazard Discussion An agency theory is a contractual relation between an agent and a principle. An agency relation has a couple of problems. They are generally categorized into one of two forms: moral hazard or adverse selection. Moral hazard arises when a principal is unable to control the actions of an agent, […]