The principal-agent problem should always be on the list of candidates, but it can occasionally be eliminated as an explanation. I was listening to the This American Life episode “Return to the Giant Pool of Money”, and more than one of the agents in the chain had large amounts of their resources wiped out.
The question of whether an agent’s interests are aligned with the principal’s is largely orthogonal to the question of whether the agent achieves a positive return. The agent’s expected return is more relevant.
There were many agents involved in the recent financial unpleasantness whose harm was enabled by the principal-agent problem. My intended examples did not suffer that problem. I could have made that clearer.
The principal-agent problem should always be on the list of candidates, but it can occasionally be eliminated as an explanation. I was listening to the This American Life episode “Return to the Giant Pool of Money”, and more than one of the agents in the chain had large amounts of their resources wiped out.
The question of whether an agent’s interests are aligned with the principal’s is largely orthogonal to the question of whether the agent achieves a positive return. The agent’s expected return is more relevant.
There were many agents involved in the recent financial unpleasantness whose harm was enabled by the principal-agent problem. My intended examples did not suffer that problem. I could have made that clearer.