Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

تمرين 14

In the absence of legally binding contracts, a principal can still mitigate agent moral hazard by maintaining a reputation that it will let the agent suffer for its action seven if this harms the principal in the short run, too. What other areas of life besides bank regulation do we observe principals trying to build such reputations?