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Explain what the principal agent problem is. Suppose you have a teacher who only talks about...

Explain what the principal agent problem is. Suppose you have a teacher who only talks about his private life in class rather than teaching. What are some ways the college can insure that their teachers are teaching?

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Answer #1

Principal agent problem occur when one person make decision and take action on behalf of another person .this problem arises where agent is want to act in their own best but which is contrary to principal .we can say this problem is arises because both parties have their different interest .

here are some ways the college can insure about teacher-

First of all an agreement will be designed by the principal and determine the monitoring procedure.principal i.e school should create framework and try to gives more incentive on the basis of agent's performance.

Principal should check and evalute the performance oF agent.school shall fix camera on all classes so that they can check what is teacher doing.School can ask to students or get feedback about teacher in weekly basis so that college knows about efficiency of teacher.

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