Showing papers on "Agency cost published in 1975"
TL;DR: In this paper, the core part of the then newly developed theory of agency, which had been independently proposed by Stephen Ross and Barry Mitnick, is described, and problems of agency are reviewed, and the policing process examined.
Abstract: This paper presented the core part of the then newly-developed theory of agency, which had been independently proposed by Stephen Ross and Barry Mitnick. The paper described a typology of agency relationships based on the nature of the consent between agent and principal, the source of specification of the agent's acts, and the degree of discretion possessed by the agent. Common behaviors and norms of agency are described, including the fiduciary norm. Problems of agency are reviewed, and the policing process examined. Applications are made to the legislative representative and to the ambassadorial relation. This paper reflects continued development of the approach over what appeared in Mitnick's original 1973 paper.
16 citations
TL;DR: In this paper, the fiduciary norm, which prescribes agent behavior solely for the goal of the principal, without regard for other goals, is defined in the context of the theory of agency.
Abstract: The fiduciary norm, which prescribes agent behavior solely for the goal of the principal, without regard for other goals, is defined in the context of the theory of agency. The fiduciary program, a set of procedures for determining the principal's preferences and acting for them, is then defined and discussed. Two consequences of the fiduciary norm, a tendency toward maximization, and a fiduciary paradox, are analyzed. The general choice situation of agency is examined, with identification of the fiduciary function from which the agent selects returns to himself and his principal, and types of lexicographic agents, notably the lexical fiduciary.
9 citations