Question

Las Vegas- For years, Msgr. Kevin McAuliffe lived a double life.

He was widely admired by his flock at St. Elizabeth Ann Seton, which he helped build into one of the largest Roman Catholic parishes in the Las Vegas area. But at the same time, he was stealing money from the church.

Over nearly a decade, he pocketed $650,000. His motive was all too familiar in Nevada. McAuliffe was a gambling addict.

On Friday, U.S. District Judge James C. Mahan sentenced the priest, who pleaded guilty to charges stemming from the thefts, to more than three years in prison and ordered him to pay restitution. In doing so, the judge waved off the defense’s request to give McAuliffe probation. (Spokesman-Review, Jan 14, 2012.

In the above situation, who is the principal and who is the agent? Explain

Answer 1

Answer) Principal-agent is an economic concept which discusses about moral hazard wherein agent gets to act and take decisions on behalf of principal and in usch cases moral hazard takes place if agent acts in bad faith or in vested interests,in this case McAuliffe acted as an agent stealing money from church,church here which posed faith in McAuliffe is principal and McAuliffe stealing is the moral hazard,so principal is church and agent is McAuliffe.

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