A survey of agency models of organizations

Abstract In recent years Neoclassical economists have begun to turn their attention to issues of firm organization, stimulated in large part by methodological advances in the economics of incentives and incomplete information. The paradigm on which much of this work is based views an organization as an agency relationship. Agency models incorporate two basic features of organizations: incomplete information and goal conflict among members of the organization. This essay characterizes and critiques the existing research on agency models of organizations in order to broaden the set of consumers of such models and to stimulate the production of new research.

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