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Let's talk together about what would be the best incentive to optimize our performance". And that's not what happened.
But this creates a problem, because these agents have an inherent incentive to optimize activities and resources for themselves rather than for their principals, driving a greater share of the company's profits into their own pockets instead of back to the investors.
And, perhaps more importantly, I think this new wave of better, lighter Android tablets will spur people to actually buy them, so developers will have a bigger incentive to optimize their apps for the tablet.
Consider that city dwellers know the risks of human-induced future urban climate changes, and that they have an incentive to optimize the composition of the urban atmosphere in order to aim at achieving their personal best-beings in the city where they live and work.
The principal-agent problem occurs because the agents have an inherent incentive to optimize activities and resources for themselves rather than for their principals.
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Processes that rely simply on checking activity against limits may miss potential problems and, in extreme cases, create incentives to optimize against internal limits in ways that produce new, undesirable risks.
Even if they decide to become cord cutters – or more accurately, pay TV cutters – their access to OTT content will still be dependent on the broadband pricing policies of the very same pay TV provider, who have incentives to "optimize" pricing, performance, and features around their offering, whether broadcast or digital.
Instead, shared interests focus on achieving high patient satisfaction, and the best possible care is realized through shared ownership or financial incentives to optimize the clinic's overall performance.
Overall, this paper suggests that ownership structure and managerial incentives can adjust to optimize strategic choices and firm performance.
This is based on the assumption that the public sector, which are not-for-profit, do not provide the right incentives for managers to optimize the use of resources [ 27].
As a result, there may be less financial incentive among these providers to optimize patient Medicare encounter billing since much of their patient revenue is not as strongly dependent on billing coding for specific visits [ 47].
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