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Agency Dilemma: A Theory of Shirking, Embezzlement, and Bribery Prevention: A Theory of Out-sourcing and Privatization: A Theory of Cooperation

This paper shows that economists have so far been applying a wrong model to explain and rectify the agency dilemma. In particular, policing other people is just another agency paradox. Since the agency problem is usually considered a crime problem, this paper applies the new crime prevention theory developed by Choi (2015a) to explain the motive of agents and to offer measures to prevent them from shirking or embezzling. However, this paper encourages the principal and agent to cooperate to achieve higher profit.