
As Naval Ravikant has rightly pointed out-"Almost all human behavior can be explained by incentives. The study of signaling is seeing what people do despite what they say. People are much more honest with their actions than they are with their words. You have to get the incentives right to get people to behave correctly." -⚔️ The principal-agent problem is a conflict in priorities between a person or entity (the "principal") and the representative (the "agent") authorized to act on their behalf.This problem occurs in scenarios where agents have incentives to act in their own best interests, which are contrary to those of their principals.😨 Did you know it was the underlying cause for the crash of 2008?📖 I spent a couple days last week understanding the principal agent problem in detail and the impact in our everyday life, and distilled my learnings into this blog post.Check it out: Principal Agent Problem see hubwealthy.com/wealthy






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