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Q1: Identify an example of a management scenario from current events involving a

Q1: Identify an example of a management scenario from current events involving adverse selection or moral hazard. Discuss some methods with your classmates for correcting the potential problems of the asymmetric information.
Q2: Describe an example you have experience with of the principal-agent problem (for example, you have a desire for your children to listen in school and do well, while for them, goofing off at school might be much more fun), and explain how incentives can be used to overcome the principal-agent problem (such as paying your children for good grades). Include in your explanation an analysis of the risks in using incentives.

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