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Decision Analysis and the Principal-Agent Problem
Decision Sciences: Journal of Innovative Education
  • Brett E. Katzman, Kennesaw State University
  • Penny Verhoeven, Kennesaw State University
  • Hope Baker, Kennesaw State University
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The article discusses the classroom lecture that improves the traditional instruction in decision analysis by relating decision making under risk to the principal-agent problem. The baseline decision scenario is examined both from the perspective of a firm desiring to maximize the expected profit and from the perspective of a risk-averse manager desiring to maximize the expected utility. The article also provides students' assessments regarding the effectiveness of the lecture.
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Katzman, Brett E., Penny Verhoeven, and Hope M. Baker. "Decision Analysis and the Principal–Agent Problem." Decision Sciences Journal of Innovative Education 7.1 (2009): 51-57.