Which of the following is a cause of 'agency problem'?
A) Sub-contractors failure to meet milestone deadlines.
B) Conflict of interest between buyer and seller due to engineering and planning problems.
C) Conflict of interest between buyer and seller due to risk allocation.
D) Conflict of interest between buyer and seller due to poor quality performance.

Question

Which of the following is a cause of 'agency problem'? 
A) Sub-contractors failure to meet milestone deadlines. 
B) Conflict of interest between buyer and seller due to engineering and planning problems. 
C) Conflict of interest between buyer and seller due to risk allocation. 
D) Conflict of interest between buyer and seller due to poor quality performance.

Quizplus · Accepted Answer

Agency problem arises when there is a conflict of interest between the agent (seller) and the principal (buyer), such as risk allocation. The other options listed are not directly related to agency problem.

Which of the Following Is a Cause of 'Agency Problem