Describe the principal agent problem that can exist in the labor market. What signals can an employer look for that might indicate the traits they are seeking in a new employee?  What steps can an employer take to motivate employees and reduce the potential for “shirking” that might occur due to the principal-agent problem?

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter1: Introduction: What This Book Is About
Section: Chapter Questions
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Describe the principal agent problem that can exist in the labor market. What signals can an employer look for that might indicate the traits they are seeking in a new employee?  What steps can an employer take to motivate employees and reduce the potential for “shirking” that might occur due to the principal-agent problem? 

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