학술논문
The New Form Agency Problem: Cooperation and Circular Agency
Document Type
research-article
Source
The B.E. Journal of Economic Analysis & Policy. 24(1):97-116
Subject
Language
English
ISSN
1935-1682
Abstract
This study explores cooperation in the circular agency problem. In circular agency, an agent has weak power in the face of its principal. This research explores a cooperation mechanism in which three participants simultaneously have the identity of principal and agent, in order to illuminate the power struggle between the board of directors, the external shareholder, and the manager of a company. We use the equilibrium results to explain the phenomenon of cooperation between members of the enterprise in practice. Our results have implications for firm governance.