Introduction to Principal-Agent Problems

Need to plow snow on your lawn? Hire someone to do it!
Need to invest some money you have? Sign a contract with a financial advisor!
Need to purchase auto insurance? Find a good insurance company!
In all these situations, we sign contracts with other parties. In our day-to-day life, we agree on terms and sign contracts with different entities to get various things done. Whether you're getting a good contract depends on how interests align and what conditions are imposed. Principal-Agent problems provide tools to analyze these mathematically. In this talk, I will walk you through the basics of principal-agent problems and then give some background on the literature. Finally, I will introduce and discuss my problem and its contributions to the field.