Agent Troubleshooting Mechanisms: At the Confluence of Law and Economics

Abstract

In his work Wealth of Nations (1776), Adam Smith is the first researcher to address the issues of ownership and control. Then, after 156 years, Adolf Besle and Gardiner Means, in The Modern Corporation and Private Property (1932), develop the issue of the separation of ownership and control. After another 44 years, Jensen and Meckling (1976) draw attention to the predominance of firms with small share capital. The work of the two researchers, a 55-page article, becomes the most cited bibliographic reference. Specialists in organizational economics, management sciences, and especially finance specialists and researchers will report on this article. Immediately after publication, Jensen and Meckling (1976) laid the groundwork for Positive agency theory (PAT).

Keywords

• positive agent theory
• agent normative theory
• solution mechanisms
• agent problems