These factors give rise to the two phenomena of information asymmetry between principal and agent that authors within the field of principal-agent theory call the “adverse selection problem” and the “moral hazard problem.” The “adverse selection problem” is also called a precontractual problem by Mueller (2003)—based on the situation for the principal at the time of selecting an agent to manage the project. The agent will then claim to have certain knowledge within fields that are necessary to perform the task, while the principal will have limited ability to verify this. The “moral hazard problem,” which Mueller (2003) also calls a post-contractual problem, is used to denote the s...
- How Project Manager–Project Owner Interaction Can Work Within and Influence Project Risk Management
- from Agile Project Management: Essentials from the Project Management Journal
- Publisher: Jossey-Bass
- Released: June 2013
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