= 27d567bc2d48d9f40e9ccc20ea370b15)
mattnewport comments on Open Thread: June 2010 - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (651)
In some cases this was an example of the principal–agent problem - the interests of bank employees were not necessarily aligned with the interests of the shareholders. Bank executives can 'win' even when their bank topples.
The principal-agent problem should always be on the list of candidates, but it can occasionally be eliminated as an explanation. I was listening to the This American Life episode "Return to the Giant Pool of Money", and more than one of the agents in the chain had large amounts of their resources wiped out.
The question of whether an agent's interests are aligned with the principal's is largely orthogonal to the question of whether the agent achieves a positive return. The agent's expected return is more relevant.
There were many agents involved in the recent financial unpleasantness whose harm was enabled by the principal-agent problem. My intended examples did not suffer that problem. I could have made that clearer.