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For instance, the agent may be a seller who privately knows the quality of a car. Seminal contributions to private value models have been made by Roger Myerson and Eric Maskin, while interdependent or common value models have first been studied by George Akerlof. Adverse selection models with private values can also be further categorized by ...
Errors and omissions (E&O) insurance, which may exclude negligent acts other than errors and omissions ("mistakes"), is most often used by consultants and brokers and agents of various sorts, including notaries public, real estate brokers, insurance agents themselves, appraisers, management consultants and information technology service providers (there are specific E&O policies for software ...
The principal–agent problem typically arises where the two parties have different interests and asymmetric information (the agent having more information), such that the principal cannot directly ensure that the agent is always acting in the principal's best interest, particularly when activities that are useful to the principal are costly to ...
Myth 2: Red cars cost more to insure. One of the most persistent myths about auto insurance is that red cars cost more to insure. However, this common belief simply isn't true.
Moral hazard includes a partnership between a principal and agent and occurs when the agent may change their behaviour or actions after a contract has been finalised which can cause adverse consequences for the principal. [16] Moral hazard is present when there is a change in the agent's behaviour after taking out insurance cover to protect ...
On Friday, the SEC disclosed settling charges against Austin Kauh of Wilton, CT, for insider trading before the December 2021 announcement that Kauh’s employer, Chewy, Inc (NYSE:CHWY ...
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An agency cost is an economic concept that refers to the costs associated with the relationship between a "principal" (an organization, person or group of persons), and an "agent". The agent is given powers to make decisions on behalf of the principal. However, the two parties may have different incentives and the agent generally has more ...