The principle-agent problem can be categorized as an information symmetry problem.Identify this information symmetry.
A)Adverse selection
B)Fundamental attribution error
C)Prisoner's dilemma
D)Moral hazard
E)False consensus

Question

Quizplus · Accepted Answer

Moral hazard is a type of information asymmetry in which one party (the agent) has more information than the other party (the principal). This can lead to problems because the agent may take actions that are not in the best interests of the principal.

The Principle-Agent Problem Can Be Categorized as an Information Symmetry