This region off analysis is because of the newest bonuses and you can disincentives out-of a realtor acting on account away from a primary one he’s assumed otherwise developed so you’re able to depict. Zero temporary summary can do justice for the high version of issues and problems felt within literature, except possibly this: a perfect agent was, for several grounds, literally impossible; and perhaps good gap can be found anywhere between just what representative does and you will exactly what the dominating need him to accomplish however, you will neither compel nor result in him regarding people feasible agencies contract.
Into the previous age economists has loyal high services with the analysis of the principal-agent condition (pick for example Milgrom and you will Roberts 1992 therefore the Wikipedia post toward “Principal-representative State”)
Even though this books lives mostly regarding subfield of economics identified once the industrial organization, it’s got big effects for the examination of politics. S. Composition written an institutional framework towards the process not out of a beneficial democracy, but from a realtor republic. There’s one problematic phrase-representative. e., one without shirking or any other forms of opportunism) along with his representative, say, the latest leased manager out-of their providers, what are the opportunity the thus-entitled agencies regarding people in the us regarding The united states-the latest chairman, the official governor, this new congress user for one’s section, in addition to county legislature representative for one’s area-normally in every significant experience represent more than a handful of customers?