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New Jersey Institute of Technology Economics Discussion

Discussion Forum on

The Principal-Agent, Adverse Selection or Moral Hazard Problem

For this assignment, you must use detailed statistical data, researched information and business, financial or economic concepts to support the arguments that you will present in your text.

Research an issue related to the Principal-Agent, Adverse Selection or Moral Hazard in the context of a company. 

You should include all of the following in your text, but can choose to incorporate more information so as to provide a more complete response:

Very briefly describe the Principal-Agent, Adverse Selection or Moral Hazard problem of your choice. You must use statistical data and factual information to address this question.

Briefly describe how that the Principal-Agent, Adverse Selection or Moral Hazard problem negatively impacted the company that you chose. 

You must integrate at least two business, financial or economic concepts acquired in this class to explain how that the Principal-Agent, Adverse Selection or Moral Hazard problem caused the issue which negatively impacted the company that you chose. You can use graphs or equations to relate the theory that you chose.

Use the knowledge acquired in this class to make a normative assessment & propose a policy recommendation that you believe would help to mitigate the adverse impact(s) of the Principal-Agent, Adverse Selection or Moral Hazard problem on the company, that you chose. (This last question will account for a significant portion of your Discussion Forum grade)

While addressing your classmates’ posts, treat your response to their posts as if you were addressing the question. As such, you should do one or more of the following:

Analyze your classmates’ posts.

Add relevant information or statistical data to your classmates’ posts.

Propose a useful counterargument to your classmates’ posts.

Propose a relevant and alternate position or information.


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