Home » Ethics » The “Principal-Agent Problem”

The “Principal-Agent Problem”

You hire someone to perform a complex and risky service, a service you know nothing about.  Perhaps you hire a surgeon or a lawyer and you know nothing about modern medicine or law.  How do you know the person you hired is performing, or has performed their job ethically, effectively and efficiently?  Can you tell by the results?  How can you judge their work prior to their work being complete?

Many of the dilemmas associated with this kind of relationship are referred to by the moniker, “the principal-agent problem”.


Professionalism is a collaborative form which solves certain aspects of the principal-agent problem.  How?


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