Article ID: | iaor19971 |
Country: | Netherlands |
Volume: | 70 |
Issue: | 1 |
Start Page Number: | 83 |
End Page Number: | 103 |
Publication Date: | Oct 1993 |
Journal: | European Journal of Operational Research |
Authors: | Ackere Ann van |
Keywords: | principal agent model |
The main characteristics of the basic principal/agent model are discussed. Several applications of this model to the fields of accounting, industrial organization, finance and marketing are presented. The potential for application to management science problems is highlighted, and a batch-size problem is analyzed to illustrate the concepts involved. The paper concludes with a discussion of the major criticisms of the agency model.